The Emperor, who marked his 68th birthday Sunday, greeted the public at the Imperial Palace in the morning together with members of the Imperial Family.

The Emperor greeted well-wishers from the balcony of Chowa Palace, flanked by the Empress, Crown Prince, Prince Akishino and his wife, Princess Akishino, and the Imperial couple's daughter Princess Nori.

The Crown Princess was not present as a precaution after giving birth to Princess Toshi (better known as Princess Aiko) on Dec. 1.

The Emperor told the well-wishers via microphone, "I hope the upcoming year will be as good as possible for the people."

At a news conference Saturday, ahead of his birthday, the Emperor expressed concerns over the impact of the recession on the nation, but said he believes the Japanese people are strong enough to overcome such difficulties.

"I am deeply concerned about the increasingly severe economic situation, the rising unemployment rate and the significant effects that this is having on the lives of the people," the Emperor said.

"Still, remembering that after the war (World War II) the people rose to the challenge of rebuilding from the devastation and created the nation we live in today, I expect that the people will overcome these difficulties," he said.

The Emperor also reminisced about events of this year, calling the horrific stabbing of over a dozen children at Ikeda Elementary School in Osaka Prefecture in June a "painful event."

Touching on Afghanistan in the wake of U.S.-led military operations following the Sept. 11 terrorist attacks on the United States, the Emperor said he could only "hope that in the future peace will firmly take root in that region." He visited Afghanistan 30 years ago when he was crown prince.

On the recent birth of the first baby to the Crown Prince and the Crown Princess, the Emperor expressed delight "at the outpouring of joy" from so many people in the country.

The Emperor recalled the hard times he and the Empress faced in raising their children by themselves while attending to official duties at the same time.

On the issue of the privacy of the Imperial Family, the Emperor said he and the Empress did their best to ensure their children's private lives were protected, but were also "obliged to respond to the wishes of the people to see for themselves" that the children were "growing up well."

The Emperor also remarked on Japanese-South Korean relations, saying the two countries have a long history of human exchanges, particularly with people from South Korea immigrating to or being invited to Japan and bringing culture and other advances with them.

"It was truly fortunate that such culture and technology was brought to Japan through the enthusiasm of Japanese people and the friendly attitude of the Korean people. I also believe that it contributed greatly to Japan's subsequent development," he said.

The Emperor expressed regret, however, that "Japan's exchanges with Korea have not all been of this kind. This is something that we should never forget."

He expressed hope that next year's World Cup soccer finals, to be jointly hosted by Japan and South Korea, will "result in enhancing understanding and mutual trust between the Japanese and Korean people."

Japan's ties with South Korea were strained by Japan's approval of a history textbook that critics say whitewashes Japan's wartime atrocities and the visit of Prime Minister Junichiro Koizumi to a Tokyo shrine for Japan's war dead that also honors war criminals.