1995-96: REVIEW AND OUTLOOK : Murayama Says Japan Will See Recovery in ’96

Japanese Prime Minister Tomiichi Murayama said in a New Year’s message issued today that he is convinced that the nation’s economy will start recovering in 1996 after four years of recession.

“We will make utmost efforts to achieve full-fledged economic recovery in 1996,” Murayama said.

The government adopted two major stimulus packages in 1995 to get the economy back on a growth track after the collapse of the so-called bubble economy that was pumped up by soaring stock and land prices in the late ‘80s.

“There are signs of economic recovery now. . . . I am convinced that bright prospects will expand this year,” he said.

Murayama, who will visit Moscow in April, also said he will meet Russian President Boris N. Yeltsin and that he would like to explore ways of solving a dispute over the four Kuril Islands, which lie just off Japan’s main northern island of Hokkaido.

Moscow and Tokyo have been at odds for decades over the islands, which the Soviet Union seized at the end of World War II. Japan calls them its Northern Territories and demands their return. The dispute has slowed Japanese investment in Russia.

“Russia is now going through economic reforms, and I will discuss what Japan can do to help the reforms,” Murayama said.

Turning to domestic politics, Murayama said he will strive to maintain his three-party coalition government.

Murayama said he has no intention of dissolving parliament and calling elections now, because he would like to see passage of the budget for the 1996-97 fiscal year.

Murayama need not call a general election until mid-1997, but many members of parliament have said he most likely will call general elections around midyear.