Two weeks after Sakae Sasaki decided to open a cake shop in Tokyo's Meguro Ward in 1996, she realized she was pregnant.

But she uncompromisingly decided to give birth to both her baby and the shop -- as a single mother.

"Women have more guts once they get determined," said Sasaki, 37, who left her job as president of a script-writing company for television programs.

She gave birth to her daughter less than a month before opening her store in April 1997. "It was like delivering twins," she recalled.

Sasaki is a "new breed" of Japanese woman -- one who has come to realize that she has the right to pursue a career just like a man.

Japanese companies must find a place for career-minded women.

Unlike the legions who married during the rapid economic growth of the 1960s, when it was taken for granted women would quit their jobs and stay at home to raise children, the modern Japanese woman is now managing both her career and child-rearing goals at the same time. This dual pursuit, however, has proven to be an uphill battle against corporate tradition.

Naohiro Yashiro, a professor of economics at Sophia University in Tokyo, said Japan's traditional male-dominated environment will have to change if the government is determined to beat the coming workforce shrinkage being brought about by its rapidly aging society.

According to projections by the Management and Coordination Agency, the country's working population will peak at 68.7 million in 2005, after which it will drop to 62.6 million in 2025.

Labor Ministry officials acknowledge that the nation will have to make greater use of senior citizens, women and foreigners to help make up for this shortfall.

As a result, workers will come to be evaluated based on their ability rather than their gender, Yashiro predicted, adding that the traditional two-track employment system that puts most women on the clerical track and most men on the managerial one will be abolished.

He also said most companies will come to outsource clerical work, now often carried out by female workers to support male colleagues, or hire part-time workers to do it so that all regular employees will be able to engage in managerial work.

Yashiro said the male-dominated corporate environment saw its heyday in the rapid economic growth that Japan experienced in the 1960s and 70s.

Back then, firms bent on raising productivity and profits needed loyal male employees who would devote themselves to their work. Their wives, meanwhile, were expected to do the housework and child-rearing so that their husbands could focus on their jobs, he said.

In exchange for the long working hours and frequent transfers they demanded of the workers, companies introduced the two pillars of work that were to define corporate Japan for decades to come -- lifetime employment and a rigid seniority system. These were moves designed to guarantee jobs.

"In a sense, companies were not only hiring the husband but his whole family as well," Yashiro said. "The entire system was reasonable."

That "reasonable" system, however, may now be one of the major obstacles to expanding the nation's labor force.

The statistical rise and decline in the percentage of employed women in each age group -- often explained as the M Curve -- shows that a typical woman leaves her job once she gets married or has children. She then begins working again when her youngest child is around school age.

Although more Japanese women are now managing to keep their careers on track and raise children at the same time, making the M Curve flatter, a majority of them still give up on their careers.

Experts admit that despite the very visible changes currently taking place both socially and economically, it will not be easy to change Japan's male-dominated environment, the accepted norm for so many years.

Keiko Higuchi, director of the semigovernmental Center for the Advancement of Working Women, said that compared to government offices and the political arena, major corporations are the ones that will most likely struggle in the shifting winds.

Japanese companies only allow a woman two choices -- devote her life to the company like her male counterparts, or quit after getting married or having children, she said.

In addition, Higuchi noted, there are only two ways for women to get a part in the decision-making process so they can create a female-friendly work place. Either work at a government office and parachute into a high position in the private sector, or start your own business and make it big.

Kaku Sechiyama, an assistant professor of sociology at the University of Tokyo, says the key to creating an environment that encourages female workers to continue working after having children is to burden husbands with traditionally female jobs such as housework, child-rearing and taking care of elderly relatives.

At present, it is only natural for employers to prefer hiring men rather than women if they know female workers will take leave for a period of time when they give birth to children or take care of aging parents or in-laws, he said.

"We need a system that imposes such burdens equally on male workers so that employers know that there will be a certain disadvantage regardless of whether they hire men or women," Sechiyama said.

He pointed out that Sweden's so-called "papa's month" system, which forces men as well as women to take at least 30 days' leave when they have children, is a good example. In addition, women who are caring for children under 8 can leave work for up to 360 days and still be eligible for 80 percent of their salary during that period.

Another outdated hurdle is the Japanese tax system, which many critics say contains disincentives for women who want to continue working after marriage.

If a wife's annual income is more than 1.03 million yen, for example, she will have to pay income tax while her husband will not be eligible to receive tax deductions for dependents.

In contrast, if her annual income is 1.3 million yen or less, she would be able to receive health insurance and pension benefits without having to pay premiums.

As a result, more than 30 percent of female part-timers whose spouse is the main breadwinner adjust their income so it does not exceed these thresholds, according to a report by a private research group to the labor minister.

But as one example of change, there are firms that have begun introducing a system supportive of female workers, providing role models for other companies to follow.

Benesse Corp., the nation's top provider of education through correspondence courses, is known for its in-house day-care center, where about 20 babies and toddlers ranging in age from six months to three years are left under the care of authorized nurses.

The firm also allows its employees -- regardless of gender -- to take child-rearing leave until the end of its business year after the child is a year old. This means that if the child is born in April, the parent may take nearly two years of leave from work.

It also lets employees work shorter hours until the child reaches school age.

"We do not intend to place emphasis only on female workers," said Yoshinobu Hamano, a Benesse spokesman. 'We try to support (all) workers so that child-rearing and elderly care will not serve as a drawback for them in continuing their work."

Due to mounting public pressure to encourage women to continue working, the government revised the Equal Employment Opportunity Law to require companies and local governments to give employees leave to take care of family members. By law, employers cannot dismiss employees for taking such leave.

Unlike the original law, which only required employers to "make efforts" to ensure equal treatment of female employees, the revised law, which took effect in April 1999, also bans gender-specific job descriptions in classified ads, as well as sexual discrimination in employment, deployment, promotion and job training.

Another characteristic of the revised law is that it encourages employers to take positive action to increase the number of women at the workplace.

"With the revised antidiscrimination law and family-leave law, I believe Japan's legal framework (for supporting working women) has reached the level of that of other industrialized countries," said Akiko Yoshimoto, an official of the Labor Ministry's Women's Bureau.

Meanwhile, Higuchi of the Center for the Advancement of Working Women claims that increasing the number of self-reliant women is the key to sustaining Japan through its graying years.

"The 21st century will be the century of the elderly woman," she noted, given the fact that some 18 percent of the population is predicted to be women over 65.

Their financial stability will depend on how long they worked or what kind of social security program they joined during their active years, Higuchi said.

Given the future, "Japan needs to create a society in which any worker with enthusiasm and ability will be able to continue working and obtain a certain amount of income."