Amadeusz Juskowiak

Japans unemployment rate seen rising to 35 pct

Japans unemployment rate is expected to continue to climb to about 35 pct within the next year from Januarys three pct record senior economists including Susumu Taketomi of Industrial Bank of Japan said

Decembers 29 pct was the previous worst level since the governments Management and Coordination Agency began compiling statistics under its current system in 1953

There is a general fear that we will become a country with high unemployment said Takashi Kiuchi senior economist for the LongTerm Credit Bank of Japan Ltd

The government which published the January unemployment figures today did not make any predictions

At present we do not have a forecast for the unemployment rate this year but it is difficult to foresee the situation improving a Labour Ministry official said

Finance Minister Kiichi Miyazawa said the government had expected the increase and had set aside money to help 300000 people find jobs in fiscal 1987 beginning in April

Prime Minister Yasuhiro Nakasone told a press conference the record rate underlines the need to pass the 1987 budget which has been held up by opposition to proposed tax reforms

The yens surge has caused layoffs in the mainstay steel and shipbuilding industries Other exportdependent industries such as cars and textiles have laid off parttime employees and ceased hiring economists said

Although the growing service industry sector has absorbed a great number of workers the trend is starting to slow down said Koichi Tsukihara Deputy General Manager of Sumitomo Bank Ltds economics department

However other economists disagreed saying the service sector would be able to hire workers no longer needed by the manufacturing sector over the next five years

Reuter