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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (7287)	7/30/1999 6:07:00 AM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 15132

Worldwide Economic Recovery Giving Greenspan the Jitters? Not in Japan ... Japan joblessness jumps to record, spending down By William Mallard TOKYO, July 30 (Reuters) - Japan reported record high June unemployment of 4.9 percent and a fall in wage-earner spending on Friday, dampening cheer from a surge in industrial output reported one day earlier. Consumer prices in Tokyo and nationwide remained flat to lower, indicating that persistent deflation fears will force the Bank of Japan to keep interest rates at rock bottom. Prime Minister Keizo Obuchi also told the cabinet that he wanted to remain flexible in fiscal policy and that he was eyeing a stimulative supplementary budget for the year through next March. The cabinet approved ceilings to keep the 2000/01 budget around this fiscal year's initial level of 82 trillion yen ($700 billion, but senior policymakers have begun discussing an extra budget for this fiscal year of five trillion yen or more. Trade Minister Kaoru Yosano said the government, in deciding on an extra budget, would take into account not only key April-June gross domestic product data due in September, but also factors such as unemployment, interest rates and exchange rates. Finance Minister Kiichi Miyazawa said the government cannot let up on fiscal spending for the time being, while Economic Planning Agency chief Taichi Sakaiya said the need for a supplementary budget would be strong unless GDP surged or inflation emerged. Friday's economic data, on the heels of the June surge in industrial output, showed that conditions remained severe for personal consumption, which accounts for 60 percent of the economy. "These data are a reminder that at the time of an economic turning point, there are good numbers and bad numbers," said Tomoko Fujii, senior economist at Nikko Salomon Smith Barney. She told Reuters Television that, with the government expected to continue its support, the economic recovery was still on track. Unemployment spiked 0.3 percentage point in June as companies continued to cut payrolls in the fight to shed jobs and overcome the nation's worst postwar recession, the government said. The jobless rate topped the previous record 4.8 percent rate of March and April and exceeded the average forecast, also at 4.8 percent, in a Reuters survey of economists. Total payrolls marked a 17th consecutive monthly decline from year-earlier levels, and there were only 46 jobs for every 100 applicants in June, unchanged from May, the government reported. The jobs data lifted the bond market, with the most recently issued 10-year government bond yield easing 0.015 percentage point to 1.790 percent by midday. But the market was still wary of signs of recovery after Thursday's output jump. Joblessness is among the worries prompting consumers to keep a firm grip on their wallets. Spending by Japanese wage earners' households in June fell 1.8 percent in real terms from a year earlier, the agency reported separately. Spending had risen in May for the first time in four months. Households spent just 72.2 percent of their disposable income, down from 72.4 percent in May. Wage earners' incomes, however, rose 1.0 percent in real terms in June from a year earlier, marking the first rise in four months. But the agency said this was largely a result of the timing of summer bonus payments. The agency also reported consumer prices in the Tokyo area were flat in July from a year earlier but down 0.4 percent from the previous month. "Tokyo consumer prices were down a bit from the previous month, but prices continue to move in a stable manner," an Economic Planning Agency official told reporters. The Bank of Japan has said it will continue driving the key overnight interest rate essentially to zero until fears of deflation are gone. Economists surveyed by Reuters recently said this would be at least until well into next year. Also keeping deflation in the picture and potentially tripping up the economy's tentative moves toward recovery was a stubborn rise in the yen, with the dollar slumping to about 114 yen overnight, its lowest since February.