Japan Keeps Cautious Outlook on Economy
August 9, 2000 - 0:0
TEHRAN Japan kept its cautious outlook on the economy Tuesday, saying the world's second-largest economy still lacked robust consumer spending and secure employment, AFP reported from Tokyo. "The economy has not yet got out of its severe situation but activity continues to improve moderately," the Economic Planning Agency said in its monthly report.
"Movements toward a self-sustained recovery are gradually becoming stronger mainly in the corporate sector," said the report, the official verdict on the state of the Japanese economy. But it failed to upgrade the assessment in August as an agency official pointed out sustained weakness in consumer spending and employment obscured prospects for economic recovery. "Although we are starting to see signs of improvement in the economy, we must look it very carefully because there are some weak areas such as consumption and employment," the agency official said.
The August report described consumer spending as "broadly flat." "Although there is the view that the extremely hot summer conditions will stimulate consumer spending, we would like to watch developments more cautiously," the official said. The report also noted a rise in the number of corporate bankruptcies. "The number of bankruptcies has climbed to a high level and there is an increase in the amount of liabilities," it said. The collapse of department store chain Sogo Co. Ltd. also weighed on the agency's decision not to upgrade its economic assessment, the official said.
Sogo, burdened with debts from heavy expansion, collapsed and sought court protection on July 12. The government had agreed to cancel almost half the 170-year-old Sogo store chain's 200-billion-yen ($1.9 billion) debt to Shinsei Bank Ltd. but it had to withdraw the scheme under public pressure. In June, the number of Japanese bankruptcies jumped 21.2 percent year-on-year to 1,287, according to private research agency Teikoku Databank. It was the eighth month in a row that the number of corporate failures had climbed year-on-year and the amount of liabilities left by the bankrupt firms rose 1.8 percent to 1,840.8 billion yen ($17.0). Japan's jobless rate stood at 4.7 percent in June, marking the first rise in four months.
The jobless rate for men was 4.8 percent and the rate for women at 4.6 percent.
"Movements toward a self-sustained recovery are gradually becoming stronger mainly in the corporate sector," said the report, the official verdict on the state of the Japanese economy. But it failed to upgrade the assessment in August as an agency official pointed out sustained weakness in consumer spending and employment obscured prospects for economic recovery. "Although we are starting to see signs of improvement in the economy, we must look it very carefully because there are some weak areas such as consumption and employment," the agency official said.
The August report described consumer spending as "broadly flat." "Although there is the view that the extremely hot summer conditions will stimulate consumer spending, we would like to watch developments more cautiously," the official said. The report also noted a rise in the number of corporate bankruptcies. "The number of bankruptcies has climbed to a high level and there is an increase in the amount of liabilities," it said. The collapse of department store chain Sogo Co. Ltd. also weighed on the agency's decision not to upgrade its economic assessment, the official said.
Sogo, burdened with debts from heavy expansion, collapsed and sought court protection on July 12. The government had agreed to cancel almost half the 170-year-old Sogo store chain's 200-billion-yen ($1.9 billion) debt to Shinsei Bank Ltd. but it had to withdraw the scheme under public pressure. In June, the number of Japanese bankruptcies jumped 21.2 percent year-on-year to 1,287, according to private research agency Teikoku Databank. It was the eighth month in a row that the number of corporate failures had climbed year-on-year and the amount of liabilities left by the bankrupt firms rose 1.8 percent to 1,840.8 billion yen ($17.0). Japan's jobless rate stood at 4.7 percent in June, marking the first rise in four months.
The jobless rate for men was 4.8 percent and the rate for women at 4.6 percent.