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Japanese Unemployment Rate Hovers Near Post-War High - 2002-09-27


Japan's unemployment rate hovers near a post-war high and two electronics makers unveil a joint venture.

Japan's August unemployment rate stands at 5.4 percent, unchanged for the fourth straight month. That is just below a record high of 5.5 percent touched in December.

The government says the number of jobless has reached 3.6 million, the 17th monthly increase in a row.

Despite the country's modest economic recovery, most analysts expect the unemployment rate to remain high. Japanese companies are expected to continue with restructuring and layoffs.

The head of the Japanese Bankers Association said the banks' huge mountain of bad debts is part of a larger set of economic woes the nation must resolve. He urges banks to clean up billions of dollars in non-performing loans, but also says the government must tackle other issues, such as tax reform.

Masashi Teranishi, who is also president of UFJ Bank, unveiled a controversial proposal. He suggested that the government's financial watchdog purchase some of the banks' delinquent loans at above market prices.

He explained that this would be one way to help the ailing banks, but the plan is highly controversial because it would use taxpayer funds.

A price war has pushed electronics giants Toshiba and Matsushita Electric to merge their television tube manufacturing businesses. The alliance will form the world's third-largest maker of TV tubes, with annual sales of more than $2 billion.

The move follows price cuts from rivals in South Korea and Taiwan. The two Japanese companies already have a number of other joint ventures in manufacturing, research and sales.

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