At first, Japan's leading bank regulator, Hakuo Yanagisawa, refused, on the ground that his agency lacked the staff to assist the team. But he reversed himself on Wednesday, standing on the steps of the IMF's building to say, "We will work out an agreement."
The dead weight of the bad loans has also been blamed for dragging down the stock market. The benchmark Nikkei 225 index has threatened to slip below the psychologically important 10,000 level several times in recent days, and appears to be only a few weak sessions away from another benchmark of decline: closing below the level of the Dow Jones Industrial Average, which it has not done since 1957.
US, German and French stock brokerage houses here have announced layoffs, and according to a poll by Reuters, Western fund mangers reduced their holdings of Japanese stocks and bonds in August -- two ominous signs, because foreign investors account for almost half the Nikkei's trading volume.
The International Monetary Fund hopes to have its banking survey team in place by Sept. 30, the end of the first half of the Japanese fiscal year.
"Sept. 30th is going to be very tough," said Keiko Kondo, a senior strategist for a securities affiliate of a Japanese bank. In advance of that date, two of Japan's weaker big banks, Asahi Bank and Daiwa Bank, said Friday that they are in talks to merge their operations.
The picture is no better in Japan's labor market, where the true extent of the country's troubles are also somewhat obscured in the official statistics, dire as they are. After the government reported that the official unemployment rate had reached 5 percent, the highest level in nearly half a century, the Public Management Ministry said that a more inclusive method of calculating the rate would find that nearly 11 percent of workers are seeking a job.
Cleaning up the bad loan problem will require turning off the tap for many struggling companies, exacting a social cost that few Japanese politicians are prepared to bear. "If you do this, you are talking at a minimum about 3 to 4 million people losing their jobs," Katz said.
After four months in office, Koizumi has yet to be very specific about his plans to heal Japan's economy, and some Japanese are starting to voice doubts that he will ever accomplish much.
"These were not the empty 120 days, but they were very counterproductive at best," said Yoshi Tsurumi, an international business professor and author of a recent book that criticized Koizumi.
"This is a phony reformist. On the economic policies, he talks about changes and everything, but he has no plans, no specific plans."
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