[TODAY'S TOP STORIES] from [The Japan Times]
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Jobless rate hit six-year high of 5.4% in June
(Kyodo News) Japan's seasonally adjusted unemployment rate reached a six-year high of 5.4 percent in June, clouding prospects for a real economic recovery anytime soon, as the largest-ever number of people were axed, government data showed Friday.
The rate rose from 5.2 percent in May at a time when industrial production and exports are in a recovery phase. The rate is at its highest level since April 2003, when it hit a record-high 5.5 percent.
The number of jobless people increased by the largest figure ever — 830,000, or 31.3 percent — from a year earlier to 3.48 million for the eighth straight monthly increase, the Ministry of Internal Affairs and Communications said in a preliminary report.
Of the total, 1.21 million had been laid off, up 620,000 from a year ago, the biggest increase since comparable data became available in January 2003, the ministry said.
Separate data, released by the labor ministry, said the ratio of job offers to job seekers in June was at a seasonally adjusted 0.43, the lowest on record for the second straight month.
The latest ratio, down from 0.44 in the previous month, means there were 43 jobs available for every 100 job seekers.
Though economists and policymakers think the worst of the downturn is over, continuing layoffs and shrinking incomes could act as a drag on domestic demand and consumer spending — which makes up more than half of the economy — for some time to come.
The jobless rate has been rising every month since January's 4.1 percent figure, while manufacturers, hard-hit by the global economic crisis, have been drastically trimming their workforces.
Many economists believe it is just a matter of time before the rate tops the current postwar record high of 5.5 percent.
"The outcome was no surprise as an unemployment rate, a lagging economic indicator, normally continues to rise for about one year after industrial production bottoms out," said Takuji Aida, senior economist at UBS Securities Japan Ltd.
"The rate will worsen at least through the end of this year," Aida said. "It is projected to reach nearly 6 percent by that time."
The Cabinet Office said last week Japan now has millions of hidden jobless people, who are not counted in official labor figures.
Its annual report said the number of excess workers at Japanese companies during the first three months of 2009 is believed to have swelled to up to 6.07 million, and that the capability of these workers to remain employed under severe business conditions is reaching its limits.
If 6.07 million people lose their jobs, Japan's jobless rate would reach around 14 percent, according to Cabinet Office officials.
In June, the jobless rate for men grew 0.3 percentage point from the previous month to 5.7 percent, while that for women grew 0.1 point to 5.0 percent.
Jobless males numbered 2.14 million, up 540,000 from a year before, an all-time high, the internal affairs ministry said.
Jobholders amounted to 63 million, down 1.51 million from a year before, the largest drop on record. The number contracted for the 17th straight month.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
CPI takes record 1.7% fall as deflation returns
(Kyodo News) The key consumer price index fell at the fastest pace on record for the second straight month in June, the government said Friday, boosting concern about increasing deflationary pressure amid falling energy costs and sluggish demand in the recession-hit economy.
The core nationwide CPI, which excludes volatile fresh food prices, fell 1.7 percent in June from a year earlier to 100.3 against the base of 100 for 2005, the Ministry of Internal Affairs and Communications said in a preliminary report. It was the biggest fall since comparable data became available in 1971.
The headline reading marked the fourth straight month of decline, and the fall matches the average market forecast of a 1.7 percent drop in a Kyodo News survey.
Contributing to the drop, gasoline and other energy prices fell sharply from a year earlier, when crude oil prices soared to record highs. Though the gas price is on the rise on a month-on-month basis, it is still nearly 30 percent lower than the level it was at a year ago.
As well, the price of heating oil plunged 40.7 percent from a year earlier, and overseas package tour prices fell amid lower fuel costs.
Consumer appliance prices continued to fall sharply, with prices of flat-screen televisions dropping 27.9 percent and that of notebook computers down 48.4 percent. Reflecting lower grain prices, bread and spaghetti also cost less.
"Deflationary pressure is likely to continue," said Naokazu Koshimizu, a Nomura Securities Co. economist.
How deeply Japan may fall into deflation and how long it will last after the summer will depend largely on consumer demand, he added.
"If consumer demand remains weak, companies will have to cut excessive employment, and that would lead to lower income," and then firms will cut prices to cope with weaker demand, he said, adding the possibility of this scenario is "high."
The core CPI for Tokyo's 23 wards in July fell at the fastest pace — 1.7 percent — to 99.7, the ministry said. That was bigger than the average projection of a 1.6 percent drop.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
747 vet rues exit of early jumbo jets
(Kyodo News) With the departure of early model jumbo jets from the air in Japan, veteran flight engineer Kanemitsu Nakagawa is filled with a sense of loss for his longtime "girlfriend."
"I feel lonely," Nakagawa, 52, said before the last flight of a Boeing 747-300 Friday. Looking back on his nearly 30-year career at Japan Airlines Corp., he reveals his deep affection for manually controlled airplanes.
On July 24, Nakagawa was seen in the cockpit of a Boeing 747-300 flying to Honolulu. The plane was one of the so-called Classic Jumbo Jet models. The first such model, a 747-100, made its commercial debut in the United States in 1969.
During the flight, Nakagawa helped the captain hold the throttles with his outstretched left hand from his seat behind the copilot's.
The captain released his grip after the airplane leveled off. But Nakagawa's fingers were fixed to relevant equipment to make slight adjustments to the four engines.
"Every engine has its own characteristics," Nakagawa said, citing the difficulty of manually controlling the huge mechanism despite his long professional career. "One engine gathers power quickly while another goes slow."
Helping the captain and copilot during the flight, Nakagawa was also busy manipulating about 100 switches on panels in front of him, moving his arms up and down in a flurry, a movement dubbed the "octopus dance."
Nakagawa reacted strongly when JAL introduced the computerized high-tech 747-400, which only needs a pilot and copilot, saying, "What's the good of using something like automatic cars?"
He confessed he still feels uneasy about the situation in which computers cover the job of flight engineers.
It is common for crew members to say "she" when referring to an airplane. "So, it's something like, I've lost my girlfriend," Nakagawa said, referring to the decommissioned older 747s.
Nakagawa recalled the Aug. 12, 1985, crash of one early-model jumbo in the mountains of Gunma Prefecture in which 520 people died. The flight engineer of the doomed JAL jet, Hiroshi Fukuda, was Nakagawa's flight simulator instructor.
Japan's flagship carrier used to own 60 Classic Jumbo Jet series planes 20 years ago. But it now has two 747-300s, both of which will be painted white for sale overseas.
All Nippon Airways Co., JAL's archrival, replaced all of its Classic Jumbos models with newer ones in 2006.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Toshiba unit buys nuke-related firm
(Kyodo News) Toshiba Corp. said Friday its U.S. unit Westinghouse Electric Co. has acquired CS Innovations LLC, a U.S. maker of instrumentation and control systems used in nuclear plants.
The transaction, involving the purchase by Westinghouse of all CS Innovations shares by the end of August, is estimated at billions of yen.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Jobless rate hit six-year high of 5.4% in June
(Kyodo News) Japan's seasonally adjusted unemployment rate reached a six-year high of 5.4 percent in June, clouding prospects for a real economic recovery anytime soon, as the largest-ever number of people were axed, government data showed Friday.
The rate rose from 5.2 percent in May at a time when industrial production and exports are in a recovery phase. The rate is at its highest level since April 2003, when it hit a record-high 5.5 percent.
The number of jobless people increased by the largest figure ever — 830,000, or 31.3 percent — from a year earlier to 3.48 million for the eighth straight monthly increase, the Ministry of Internal Affairs and Communications said in a preliminary report.
Of the total, 1.21 million had been laid off, up 620,000 from a year ago, the biggest increase since comparable data became available in January 2003, the ministry said.
Separate data, released by the labor ministry, said the ratio of job offers to job seekers in June was at a seasonally adjusted 0.43, the lowest on record for the second straight month.
The latest ratio, down from 0.44 in the previous month, means there were 43 jobs available for every 100 job seekers.
Though economists and policymakers think the worst of the downturn is over, continuing layoffs and shrinking incomes could act as a drag on domestic demand and consumer spending — which makes up more than half of the economy — for some time to come.
The jobless rate has been rising every month since January's 4.1 percent figure, while manufacturers, hard-hit by the global economic crisis, have been drastically trimming their workforces.
Many economists believe it is just a matter of time before the rate tops the current postwar record high of 5.5 percent.
"The outcome was no surprise as an unemployment rate, a lagging economic indicator, normally continues to rise for about one year after industrial production bottoms out," said Takuji Aida, senior economist at UBS Securities Japan Ltd.
"The rate will worsen at least through the end of this year," Aida said. "It is projected to reach nearly 6 percent by that time."
The Cabinet Office said last week Japan now has millions of hidden jobless people, who are not counted in official labor figures.
Its annual report said the number of excess workers at Japanese companies during the first three months of 2009 is believed to have swelled to up to 6.07 million, and that the capability of these workers to remain employed under severe business conditions is reaching its limits.
If 6.07 million people lose their jobs, Japan's jobless rate would reach around 14 percent, according to Cabinet Office officials.
In June, the jobless rate for men grew 0.3 percentage point from the previous month to 5.7 percent, while that for women grew 0.1 point to 5.0 percent.
Jobless males numbered 2.14 million, up 540,000 from a year before, an all-time high, the internal affairs ministry said.
Jobholders amounted to 63 million, down 1.51 million from a year before, the largest drop on record. The number contracted for the 17th straight month.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
CPI takes record 1.7% fall as deflation returns
(Kyodo News) The key consumer price index fell at the fastest pace on record for the second straight month in June, the government said Friday, boosting concern about increasing deflationary pressure amid falling energy costs and sluggish demand in the recession-hit economy.
The core nationwide CPI, which excludes volatile fresh food prices, fell 1.7 percent in June from a year earlier to 100.3 against the base of 100 for 2005, the Ministry of Internal Affairs and Communications said in a preliminary report. It was the biggest fall since comparable data became available in 1971.
The headline reading marked the fourth straight month of decline, and the fall matches the average market forecast of a 1.7 percent drop in a Kyodo News survey.
Contributing to the drop, gasoline and other energy prices fell sharply from a year earlier, when crude oil prices soared to record highs. Though the gas price is on the rise on a month-on-month basis, it is still nearly 30 percent lower than the level it was at a year ago.
As well, the price of heating oil plunged 40.7 percent from a year earlier, and overseas package tour prices fell amid lower fuel costs.
Consumer appliance prices continued to fall sharply, with prices of flat-screen televisions dropping 27.9 percent and that of notebook computers down 48.4 percent. Reflecting lower grain prices, bread and spaghetti also cost less.
"Deflationary pressure is likely to continue," said Naokazu Koshimizu, a Nomura Securities Co. economist.
How deeply Japan may fall into deflation and how long it will last after the summer will depend largely on consumer demand, he added.
"If consumer demand remains weak, companies will have to cut excessive employment, and that would lead to lower income," and then firms will cut prices to cope with weaker demand, he said, adding the possibility of this scenario is "high."
The core CPI for Tokyo's 23 wards in July fell at the fastest pace — 1.7 percent — to 99.7, the ministry said. That was bigger than the average projection of a 1.6 percent drop.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
747 vet rues exit of early jumbo jets
(Kyodo News) With the departure of early model jumbo jets from the air in Japan, veteran flight engineer Kanemitsu Nakagawa is filled with a sense of loss for his longtime "girlfriend."
"I feel lonely," Nakagawa, 52, said before the last flight of a Boeing 747-300 Friday. Looking back on his nearly 30-year career at Japan Airlines Corp., he reveals his deep affection for manually controlled airplanes.
On July 24, Nakagawa was seen in the cockpit of a Boeing 747-300 flying to Honolulu. The plane was one of the so-called Classic Jumbo Jet models. The first such model, a 747-100, made its commercial debut in the United States in 1969.
During the flight, Nakagawa helped the captain hold the throttles with his outstretched left hand from his seat behind the copilot's.
The captain released his grip after the airplane leveled off. But Nakagawa's fingers were fixed to relevant equipment to make slight adjustments to the four engines.
"Every engine has its own characteristics," Nakagawa said, citing the difficulty of manually controlling the huge mechanism despite his long professional career. "One engine gathers power quickly while another goes slow."
Helping the captain and copilot during the flight, Nakagawa was also busy manipulating about 100 switches on panels in front of him, moving his arms up and down in a flurry, a movement dubbed the "octopus dance."
Nakagawa reacted strongly when JAL introduced the computerized high-tech 747-400, which only needs a pilot and copilot, saying, "What's the good of using something like automatic cars?"
He confessed he still feels uneasy about the situation in which computers cover the job of flight engineers.
It is common for crew members to say "she" when referring to an airplane. "So, it's something like, I've lost my girlfriend," Nakagawa said, referring to the decommissioned older 747s.
Nakagawa recalled the Aug. 12, 1985, crash of one early-model jumbo in the mountains of Gunma Prefecture in which 520 people died. The flight engineer of the doomed JAL jet, Hiroshi Fukuda, was Nakagawa's flight simulator instructor.
Japan's flagship carrier used to own 60 Classic Jumbo Jet series planes 20 years ago. But it now has two 747-300s, both of which will be painted white for sale overseas.
All Nippon Airways Co., JAL's archrival, replaced all of its Classic Jumbos models with newer ones in 2006.
[BUSINESS NEWS]
Saturday, Aug. 1, 2009
Toshiba unit buys nuke-related firm
(Kyodo News) Toshiba Corp. said Friday its U.S. unit Westinghouse Electric Co. has acquired CS Innovations LLC, a U.S. maker of instrumentation and control systems used in nuclear plants.
The transaction, involving the purchase by Westinghouse of all CS Innovations shares by the end of August, is estimated at billions of yen.
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