As for the adjustment in labor, Chart 3 shows that the share of labor costs in the nominal GDP declined to the lowest level since the early 1990s. In connection with the structural adjustments, as Chart 4 shows, progress has also been made in reducing nonperforming loans.
As far as major banks are concerned, they as a whole seem to be hitting the March 2005 target, namely, lowering the share of nonperforming loans in total credits to half of that in March 2002. Of course, Japan’s financial institutions are still facing quite a few problems.