TOKYO, Dec 22: Embattled Japanese Prime Minister Taro Aso called on Monday on the nation’s business leaders to protect jobs after firms shed thousands of positions due to the global economic downturn.

In an address to the Japan Business Federation, the country’s main business lobby, Aso promised the government will take measures to spur growth but said the private sector must lead the way.

“Jobs are directly linked to the livelihoods of households. As long as job insecurity exists, purse strings will be held tighter,” Aso said.

“I believe, even if it is difficult to do, we must protect jobs and lives in order to guide the economy into a good cycle,” he said.

Aso’s popularity is dwindling in part due to criticism of his handling of the economic crisis.

Major Japanese firms have downgraded their earnings, cut jobs and stopped factory lines as demand falls for exports. Toyota Motor Corp. said on Monday it expected to post an operating loss for the first time ever.

Earlier this month, Aso unveiled a giant $255 billion package aimed at stimulating Japan’s economy, the world’s second largest.

“I want you to help us so that, come the end of next year, we will look back on the year with cheers in our hearts,” Aso told the federation, locally known as Keidanren.

But Bank of Japan governor Masaaki Shirakawa, addressing the gathering, predicted a prolonged period of difficulty before things will improve.

Shirakawa said Japan was tied to overseas economies and that there was no hard evidence that the US economy would recover by late 2009, as some economists predict.

“Currently, the world economy is in a severe situation never experienced for many years that I may venture to call a crisis situation,” he said.—AFP