Posted on: Friday, May 28, 2004

Indicators suggest Japan recovery on track

By Yuri Kageyama
Associated Press

TOKYO — Government data released today underscored Japan's budding recovery as spending by wage earners jumped, industrial output continued to grow and pressures eased on unemployment.

The results are in line with the view among analysts that the world's second-largest economy may be headed toward a solid upswing. The rebound had previously been export-driven, depending on upturns in the United States and the rest of Asia, but now has spread to consumer spending.

"The outlook for the Japanese economy is turning brighter," said Shuji Shirota, economist at Dresdner Kleinwort Wasserstein in Tokyo.

Japan's unemployment rate held steady at 4.7 percent in April, an improvement of 0.8 percentage point from a record high of 5.5 percent hit in January last year, the highest level since the government began keeping track in the 1950s.

In April, the number of unemployed totaled 3.35 million, 500,000 fewer than the same month last year.

"The economy is recovering overall," Prime Minister Junichiro Koizumi told lawmakers. "The government must still work to spread the recovery to local regions."

Also today, the government said spending by wage earners surged 7.2 percent in April from the same month last year, the biggest increase in more than 20 years.

Adding to the good news, Japan's industrial production rose 3.3 percent in April from a month earlier, the government said.

A survey of about 300 companies by the business newspaper Nihon Keizai Shimbun released showed summer bonuses were up this year for the second straight year, largely because company profits were boosted by rising exports to China and healthy global sales of digital gadgets.

Japan has been struggling for more than a decade since its speculative stock and property "bubble" burst in the late 1980s. In recent years, manufacturing jobs have dwindled as companies moved jobs to other Asian nations where labor is cheaper.