Hatoyama Says Japan's Recovery ‘Unpredictable,’ Unemployment May Worsen

“The financial and economic crisis has had a serious impact on the economy and unemployment, and things are still in an unpredictable state,” Hatoyama said, according to the text of his first speech to parliament, which opened a special session today. “We’re standing at a crossroads whether to go down a declining path by holding onto traditional thinking or find a new road fostered by new aspiration and ideas.”

Hatoyama’s Democratic Party of Japan in August ousted the Liberal Democratic Party from half a century of government control. The new administration inherited an economy struggling with soaring welfare coasts, record government debt and an aging, shrinking population. Economists expect the unemployment rate to rise to an unprecedented 6 percent next year.

The new premier reiterated his pledge to implement policies to boost household incomes and make public high school tuition free. He has already frozen almost 3 trillion yen ($33 billion) in spending that was part of an LDP-formulated extra budget, and won international praise for his pledge to cut greenhouse gas emissions by 25 percent.

The administration’s “most important agenda” will be to help regional economies and aid businesses to support the economic recovery, Hatoyama said. He pledged to submit a bill to help small and medium-sized firms gain greater access to business loans, he said.