Japan's unemployment rate back to record levels and Bank debts no better

1st June 1996

Japan's gradual economic recovery received a set back in May as the official jobless rate hit a record high of 3.4% since Employment statistics have been kept from 1953. While this compares favourably to rates in Western countries, in a country where "life-time employment" was a major pillar to its identity, even rates like this are a blow to business confidence. For the second year in a row companies have cut back on graduate intakes, perhaps the most critical stage in a professional's career and a process central to Japan's employment process where traditionally, your first employer is your last. Recent realization that old career development paths and structures are changing, together with the scent of economic recovery over the past few months, have seen many quitting jobs in the 25 to 35 age group, looking for better opportunities. This has been particularly the case with women, whose jobless rate jumped to 3.7% (6.1% for woman and 3.3% for men in the 25 to 35 age group).

Recent reports also stress that the financial sector is taking a long time to recover from the Japanese recession with consumers bearing the brunt of bad debts and enormous recent losses. Bank profits vary. While several institutions have gone to the wall others show record profits, preferring to pass on bad debts to consumers.

Officials are not optimistic of a fast turnaround and business is not as buoyant as recent reports would suggest.

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