Japan’s labor market, which is characterized by lifetime employment and the seniority-based wage system, used to be perceived by many as lacking flexibility. However, recently we have seen gradual changes in the market as large-scale employment adjustment has begun to be observed. Fourth, reform of the financial system has been proceeding.
Since the autumn of 1998, a legal framework for the smooth dissolution of failed financial institutions has been established and public funds have been injected into major banks to strengthen their capital base. Although there remain a lot of things to be solved, the condition of Japanese financial institutions has significantly improved thanks to the restructuring efforts on the part of financial institutions.