Well here's Eddie right on call with this week's Straits Times column, giving details on those Japan unemployment numbers, and some interesting and preoccupying background on Japanese saving:
More and more Japanese are dipping into their savings to make ends meet, according to a survey by the Bank of Japan. A record 51 per cent of Japan's households said their savings had dropped during 2003, while the number of families with no savings at all has risen to a 40-year high of 22 per cent, the survey revealed. The results are the latest indication that a decade of economic stagnation and policy mismanagement has not come without cost and will serve to remind new cabinet ministers appointed on Monday of the urgency of their task.The disclosure also raises questions about policymakers' claims that Japan's Y1,400bn ($12.5bn, 10.9bn, £7.6bn) in personal savings will cushion the effects of a downturn.The poll covered 6,000 households, 60 per cent of which said declining incomes were the main reason they were having to use their savings, an increase of 8.4 per cent compared with last year.Figures released yesterday by the National Tax Agency showed average annual remuneration declined 1.4 per cent in 2002 compared with the previous year, the fifth consecutive year of decline. The agency said the number of wage earners decreased by 490,000 to 52.56m in 2002, the first decline in two years. Unemployment in Japan was 5.3 per cent in July this year, down from a record high of 5.6 per cent earlier this year. However, the period of unemployment is increasing, with one in three now jobless for more than a year, according to the latest figures from the Labour Ministry. Unemployment for those under 24 is about 10 per cent.The BoJ survey also unveiled deep disquiet about retirement, with 80 per cent saying they were "worried", rising to nearly 90 per cent of those under the age of 60. They cited a lack of savings and insufficient pensions benefits as the main reasons. Figures released this week by the National Pension Fund Association revealed it achieved a negative yield of 14.5 per cent on assets under management in fiscal 2002, the worst result since its launch in fiscal 1991 and its third consecutive year of negative returns. According to a recent report from Greenwich Associates, assets at employee pension funds in Japan cover only 62 per cent of future payments compared with 103 per cent in the US.Reversing declining incomes, tackling unemployment and ending the erosion of savings will depend on economic recovery - and there are signs of revival.The latest figures showed growth at an annualised rate of 3.9 per cent, although the gross domestic product deflator is running at minus 2.5 per cent and has been in negative territory since 1995.
Source: Eddie Lee, Straits Times