28 August 2001, 08:57  Takenaka says 5 pct jobless rate expected, no plan for new emergency scheme

TOKYO (AFX-ASIA) - State Minister for Economic and Fiscal Policy Heizo Takenaka said the 5.0 pct jobless rate announced today was expected and the government has no plan to launch any new emergency scheme to support employment. "The rise in unemployment does not run counter to our expectations. We have no plan to launch an emergency scheme at present," he told a regular press briefing. Takenaka said Japan has not fallen into a deflationary spiral, but added: "It is necessary not to let Japan fall into one." The government aims to help the economy recover by guiding it towards inflation, helping banks reduce their debt burden, though it is uncertain when the economy will recover even if it escapes deflationary pressure. "We are aiming to make it easier for Japanese banks to write off bad debts," Takenaka said, adding, however, that structural reform must continue for a real recovery. Asked whether the Bank of Japan should set an explicit inflation goal, he said: "The BoJ has already adopted inflation targeting as it previously said it will continue its easing until CPI goes back to zero." Takenaka said the issue of the central bank's independence should be considered separately to the bank's goals and the means it uses to achieve them.

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