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Labor minister declares emergency over unemployment rate.

TOKYO, Oct. 30 Kyodo

Health, Labor and Welfare Minister Chikara Sakaguchi said Tuesday that Japan's labor market has entered ''a state of emergency'' after the unemployment rate soared by 0.3 percentage point in September from the month before to a record-high 5.3%.

Sakaguchi and several other cabinet ministers, speaking separately to reporters shortly after the release of the sobering job data, vowed to step up employment measures, including a fiscal 2001 supplementary budget, to protect against even severer conditions expected in and after October amid the ongoing economic recession led by the slump in the information technology sector.

The cabinet members cited the aftereffects of the Sept. 11 terrorist attacks in the United States, the mad cow disease scare in Japan and the disposal of bad loans at commercial banks as factors aggravating the current employment situation.

However, Chief Cabinet Secretary Yasuo Fukuda brushed off the need to immediately change the course of economic reforms, while Financial Services Minister Hakuo Yanagisawa stressed the need to continue pursuing the disposal of bad loans -- two key undertakings the government has repeatedly said would cause painful side effects such as unemployment.

''The effects of the terrorist incident in the United States and the mad cow disease has not appeared so much yet, and we are concerned that they will become big in October,'' Sakaguchi told a news conference.

''The disposal of bad loans is also an issue to be tackled from now on and the employment situation has entered a state of emergency,'' he said.

Sakaguchi also said representatives from the government, business and labor sectors will hold a meeting on employment within the week to discuss ways to alleviate the situation.

In the meeting, the government will make efforts to realize an agreement between the business and labor sectors to create a work-sharing system in which employees share their duties to create jobs, Sakaguchi said.

Top government spokesman Fukuda and Finance Minister Masajuro Shiokawa also expressed concern over the rising unemployment rate in separate news conferences.

''The sudden rise of (the unemployment rate) by 0.3 percentage point has left me with a strong impression that the employment situation is very severe,'' Fukuda said. ''The government will tackle the issue of unemployment and employment measures with all its strength.''

Fukuda said the government plans to put emphasis on steps to tackle unemployment in the supplementary budget for the current fiscal year.

''We hope to see an early passage of the extra budget pass (through the Diet) and to ensure its effective use,'' Fukuda said.

Shiokawa said that although he thinks the 550 billion yen allocated for employment measures in the extra budget is not enough, he will make sure it is used effectively.

The rising unemployment rate also brought into focus Prime Minister Junichiro Koizumi's aggressive structural reform programs.

Asked whether Koizumi would be forced to consider changing his mind about pushing ahead with reforms should the unemployment rate rise further, Fukuda said, ''I think that is an issue that should be considered comprehensively.''

Sakaguchi said, ''We will have to proceed with deregulation and structural reforms while analyzing the employment situation carefully.''

Yanagisawa called it ''inevitable that companies will promote restructuring'' with the Financial Services Agency implementing tougher assessments of loans held by banks in a bid to accelerate the disposal of bad loans.

Noting that the September data have yet to show the effects of the disposal of bad loans, he said the impact is likely to appear in the future.

''But we must promptly pursue the disposal of bad loans as part of the structural reforms'' even if the jobless rate deteriorates, he said.

Economic and fiscal policy minister Heizo Takenaka said, ''We must take measures quickly to prevent it (the job issue) from becoming a social program.''

Referring to recent International Monetary Fund estimates that Japan's jobless rate may reach 5.6%, Takenaka said, ''We must work firmly to rebuild the economy instead of relying on patchwork measures.''

Some cabinet members taking part in an informal meeting in the morning called attention to areas suffering the most, according to Fukuda.

Fukuda quoted Koji Omi, minister in charge of Okinawa affairs, as saying Okinawa's unemployment rate rose to 9.4% and that the whole government should work to alleviate the plight in the southernmost prefecture.

Shiokawa noted that the unemployment rate was also high in Osaka while Fukuda pointed out that the number of those under welfare programs has jumped in the recent past.
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Publication:Japan Weekly Monitor
Date:Nov 5, 2001
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