JAPAN'S UNEMPLOYMENT RATE SEEN RISING TO 3.5 PCT

  Japan's unemployment rate is expected to
  continue to climb to about 3.5 pct within the next year from
  January's three pct record, senior economists, including Susumu
  Taketomi of Industrial Bank of Japan, said.
      December's 2.9 pct was the previous worst level since the
  government's Management and Coordination Agency began compiling
  statistics under its current system in 1953.
      "There is a general fear that we will become a country with
  high unemployment," said Takashi Kiuchi, senior economist for
  the Long-Term Credit Bank of Japan Ltd.
      The government, which published the January unemployment
  figures today, did not make any predictions.
      "At present we do not have a forecast for the unemployment
  rate this year, but it is difficult to foresee the situation
  improving," a Labour Ministry official said.
      Finance Minister Kiichi Miyazawa said the government had
  expected the increase and had set aside money to help 300,000
  people find jobs in fiscal 1987 beginning in April.
      Prime Minister Yasuhiro Nakasone told a press conference
  the record rate underlines the need to pass the 1987 budget
  which has been held up by opposition to proposed tax reforms.
      The yen's surge has caused layoffs in the mainstay steel
  and shipbuilding industries. Other export-dependent industries,
  such as cars and textiles, have laid off part-time employees
  and ceased hiring, economists said.
      Although the growing service industry sector has absorbed a
  great number of workers the trend is starting to slow down,
  said Koichi Tsukihara, Deputy General Manager of Sumitomo Bank
  Ltd's economics department.
      However, other economists disagreed, saying the service
  sector would be able to hire workers no longer needed by the
  manufacturing sector over the next five years.
  

