Japan unemployment rate reaches new high of 5.5%

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TOKYO — Japan's unemployment rate reached a new high of 5.5 percent in November, the third straight month of record joblessness for a troubled economy hit hard by the global slump.

The news is another grim sign in a year that will go down as one of Japan's worst on record, as rising unemployment, bankruptcies and national debt batter an economy that started the year in decline and is closing it with no recovery in sight.

Hitachi, Toshiba, and other companies have announced a combined 100,000 job cuts in Japan since Sept. 11 as sales have shrunk. Unemployment hit 5.3 percent in September and 5.4 percent in October, prompting worried consumers to cut back on spending.

The recent global slowdown, especially the slump in the United States since the Sept. 11 attacks, is making recovery difficult for the export-driven economy. Profits are shrinking and production is being scaled back.

Having battled a downturn for more than 10 years, Japan has recently slipped into its third recession in a decade. The country's economy now is forecast to record two straight years of contraction in fiscal 2002 for the first time since World War II.

The yen also is trading near a three-year low, in the 130-range against the dollar, and some analysts have said they believe it could reach 150.

For Hawai'i's battered tourism industry, the signs in Japan offer little relief. Japanese visitors to the Islands plummeted after Sept. 11 and remain off as much as 40 percent, leaving many hotels, retailers and others struggling to offset the drop.

"Japan's economy deteriorated this year because of external reasons," said Yasushi Okada, chief economist at Credit Suisse First Boston Securities (Japan) Ltd. "From now on, it will start to get bad in earnest as problems become more internal."