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Tuesday, 29 January, 2002, 05:07 GMT
Japan jobless rate hits new high
Japanese unemployed youth
Japan's army of unemployed is growing
By the BBC's Charles Scanlon in Tokyo

Japan's unemployment has reached a new record high of 5.6%.

The figure for December is the worst since records began in the early 1950s.

Prime Minister Junichiro Koizumi
Junichiro Koizumi's priority remains long term restructuring
Since last summer, when the recession began to bite in earnest, Japanese unemployment has climbed ever higher.

It is a novel and humbling experience for what was long the world's most successful industrial economy.

Slack demand is forcing the closure of thousands of small and medium size businesses every month.

Bigger corporations are cutting jobs in the face of tough competition. Many are closing factories in high cost Japan and shifting production overseas, particularly to China.

The global slowdown has hit Japan hard, but this is much more than just a cyclical downturn.

Banks under pressure

Economists say fundamental restructuring is needed, so that resources can be channeled into more productive areas.

The banks are under pressure to write off a huge burden of non-performing loans and that means more bankruptcies and even higher unemployment in the coming months.

Despite the economic gloom, the Prime Minister, Junichiro Koizumi, remains as popular as ever.

The latest opinion poll gives him an approval rating of 72%.

He has done little to alleviate the economic pain - if anything, his reform plans are contributing to the high unemployment rate.

But many are still attracted by his message that Japan has to change and they see little alternative among Mr Koizumi's rivals who offer no vision for the country's future.

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 ON THIS STORY
The BBC's Charles Scanlon
"Job centres across the country are packed"
See also:

28 Dec 01 | Business
Japan jobless rate continues to rise
29 Nov 01 | Business
Japan jobless rate hits new high
30 Oct 01 | Business
Shock rise in Japanese jobless
21 Dec 01 | Asia-Pacific
Japan's shattering year
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