Japan falls deeper into recession
Minister says recession is worsening as industry output plunges at record rate.
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On Friday Sony Corporation, the Japanese electronics and entertainment giant, announced its president was standing down amid expectations the company is facing its first annual net loss in 14 years.
Japan’s reliance on foreign markets to buy its exports has left it particularly exposed to the worldwide slowdown, which has severely dented demand for its cars and electronics.
The finance ministry also predicted that industrial production would decelerate further in February before picking up in March.
Unemployment
Yosano’s view that Japan was sliding deeper into recession came amid a separate report that said household spending, a key indicator of domestic consumer demand, had fallen 5.9 per cent from a year earlier.
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| Many have lost their jobs as factories cut output amid slumping global demand [EPA] |
And the availability of jobs had fallen to a five-year low, with only two jobs available for every three applicants, despite data from January showing that the unemployment rate had ease from 4.3 per cent to 4.1 per cent.
Al Jazeera’s Tony Cheng, reporting from Tokyo, said there were concerns that the seemingly improved unemployment figure could be slightly misleading and the result of manipulation, though it was not clear whether that was intentional.
“For example there is a rise of 312,000 who are in temporary work. It’s not a significant part of the economy but it disguises the fact that many of those people are moving from full-time jobs to part-time jobs,” he said.
Many jobless Japanese have been unemployed for more than three months, laid off when car companies first started shedding workers last year, which means they are no longer entitled to social security and are excluded from official data.
Yosano said at a news conference on Friday that the central and local governments had to implement “many measures” to support the job market soon.
Takeshi Minami, the chief economist at Norinchukin Research Institute, concurred, saying: “What Japan should focus on now is steps to help the job market.”
He added that Japan’s economy was “falling off a cliff” and may not be able to recover until early next year.
The international credit rating firm Standard & Poor’s on Thursday painted a similar picture, saying that Japan’s economy was sinking into its worst recession since World War II.
It said the world’s second-largest economy was expected to shrink four per cent in 2009, which is worse than the two per cent contraction in 1998 when Japan went through its own financial crisis after the “bubble” economy burst.