Japan - election

Japanese unemployment at record high two days before election

Article published on the 2009-08-28 Latest update 2009-08-28 14:51 TU

Taro Aso (L) and Yukio Hatoyama (R) on the campaign trail
(Photos: Reuters/Layout RFI)

Japan’s unemployment has hit a record, according to data released Friday, putting additional pressure on Prime Minister Taro Aso and his ruling Liberal Democratic Party which face a tough race in Sunday’s general election. More than a million people have lost their jobs over the past year, with 3.59 million unemployed in July, pushing the jobless rate to 5.7 per cent, up from 5.4 per cent in June.

“There is no doubt the job situation is worsening,” said government spokesperson Chief Cabinet Secretary Takeo Kawamura. “The economy is still in a recovery phase.”

Companies have been laying off workers in the face of the recession, though figures released last week showed Japan to be coming out of recession, returning to positive growth for the first time in five quarters.

"Clearly Japan is in a dreadful situation right now economically even though it was not at the epicentre of the global crisis to begin with," says Vincent Koen of the OECD in Paris.

"There is a huge margin of slack in the economy which means it is running well below capacity and therefore unemployment is shooting up;"

The rising unemployment rate will not help the ruling Liberal Democratic Party (LDP), which has been lagging behind the opposition Democratic Party of Japan (DPJ) in opinion polls conducted in the run-up to Sunday’s election.

Polls released Friday showed the DPJ, lead by Yukio Hatoyama, headed for a landslide win over Aso’s LDP.

The daily Yomiuri Shimbun newspaper questioned over 85,000 voters this week and predicted the DJP would win over 300 seats in the 480-seat lower house. This would be a sea change in Japanese politics: the LDP has ruled the country almost nonstop since it was founded in 1955.

Meanwhile, the Japanese-owned Toyota car company announced Friday it was closing a plant in California that it owned with General Motors.

This is the first time the Japanese company has ever shut an assembly plant anywhere in the world. The decision will affect the factory’s 4,700 workers.