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Japanese economy heading for recovery after 4-yr recession
TOKYO, Feb 9: The Japa nese economy Is heading toward recovery after a four year recession, with encour aging signs found in rising capital Investments and housing construction, the government said Friday, reports AP.
The economy is beginning to show a movement toward recovery again, though It's gradual," the Economic Planning Agency s monthly report said. The report used the world recovery" for the first time in six months
Such changes carry weight in Japan, where carefully worded reports may reflect shifts in policy.
But despite the report's optimism. Japan continues tq face a series of economic woes, including a continued record unemployment rate, which remained at 3.4 per cent in December.
A massive bad loan problem leftover from the spebu-
lative. asset-inflated lending of the late 1980s and early 1990s is also expected to be a drain on the economy.
In the latest report. Japanese officials welcomed some recent economic indicators as pointing to a recovery
The plunge In exports has been curbed, mainly by the dollar's recovery. The US currency, which at one point fell below 80 yen last year, has hovered around the 105 to 107-yen level recently.
A weaker dollar discourages Japanese exports by making products sold abroad more expensive. A similar government report last month had noted that exports were declining; the new report says that fall has ended.
Housing-starts are showing continuing increases.
Production has been boosted by rising private-sector and government capital investments.
Some reacted with skepticism to the report.
Trade Minister Shunpei Tsukahara warned Friday that the economic recovery for small manufacturers was lagging behind that of the big ones.
Small companies are reporting a "deterioration in business sentiment," Tsukahara told reporters.
An EPA official acknowledged that Japan haa been in a recession for the past four and a half years because the economy has shown little or no growth.
Previously, the agency announced Japan's recession had ended in October 1,993.
That fragile recovery, however, was stamped out by the strengthening yen. a slowdown in the US economy and the Kobe earthquake in western Japan. The January 1995 quake killed more than 6.000 people and caused extensive damage.