And, moving right along to the (economic) situation in Japan ...
December 25, 1998
Data: Japan Economy Still Crumbling
Filed at 9:42 a.m. EST
By The Associated Press
TOKYO (AP) -- Japan's economy continued to crumble last month, with no
indication the country is poised for a rebound, economic data released Friday
showed.
Industrial output is sliding, sales at department stores are slumping and
unemployment has reached a new postwar high, according to government
figures for November.
What's more, a report from financial authorities shows that Japan's
notoriously troubled banks have even more bad loans than previously thought.
Nothing in the latest batch of economic data supports recent predictions by
government officials that Japan's worst postwar recession is nearing an end.
The series of dour economic reports began with the release of November job
figures early Friday. The Management and Coordination Agency said Japan's
unemployment rate rose to a record-high 4.4 percent as the corporate world
cut payrolls and suffered a wave of bankruptcies.
The jobless rate was the highest since the government started keeping track of
unemployment in the 1950s, topping the previous record of 4.3 percent.
For the first time, unemployment in Japan equaled that of the United States,
where the jobless rate also was 4.4 percent in November.
Taichi Sakaiya, head of the Economic Planning Agency, said the job situation
would likely get worse before it gets better.
''There's strong pressure for the jobless rate to rise,'' said Sakaiya, one of
Japan's top economic planners.
His comments contrasted sharply with his recent upbeat prediction that the
economic slump would soon near an end.
The news Friday was no better for Japan's once-mighty manufacturers.
Industrial output at factories and mines in November fell a
larger-than-expected 2 percent compared to the previous month, the Ministry
of International Trade and Industry said.
The fall was considerably larger than forecast by private economists and the
government.
And while the ministry predicted there would be a 0.3 percent rebound in
production in December, it agreed with other forecasters that a recovery was
not yet in sight.
''There still isn't enough data to indicate that the economy has hit bottom,'' the
ministry said.
Meanwhile, the trade ministry also reported that sales at major department
stores and supermarkets fell 1.5 percent in November from a year earlier, the
seventh straight month of declines.
Economists blame problems at Japan's banks for the prolonged slump.
Many banks are buried under mountains of bad loans left from the collapse of
a speculative bubble in land prices in the early 1990s.
While they battle with those debts, they have cut back on new loans to
businesses, contributing to a nasty credit and record rise in bankruptcies.
Another report Friday showed the bad loan problem is worse than banks have
admitted.
The Financial Supervisory Agency said the 17 banks had about 49.50 trillion
yen (dlrs 427 billion) in shaky loans as of March 31, about 12 percent more
than the banks had disclosed.
Copyright 1998 The New York Times Company
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