Japan’s Jobless Rate Rises Unexpectedly as Strong Yen Squeezes Companies
Japan’s unemployment rate unexpectedly rose last month as the strong yen continues to squeeze manufacturers.
The jobless rate was 4.6 percent in December, the statistics bureau said in Tokyo today. The median forecast of 30 economists surveyed by Bloomberg News was for the rate to remain at 4.5 percent.
The government has approved four supplementary budgets worth about 20 trillion yen ($262 billion) to stoke demand and rebuild after the March 11 earthquake and tsunami. Those funds are helping support the labor market, offsetting planned job reductions at manufacturers including NEC Corp. (6701)
“Labor offers in the devastated areas have been quite strong, and this will continue to support the labor market.” Kiichi Murashima, chief economist at Citigroup Global Markets Japan Inc. in Tokyo, said before the report. “Manufacturers have become cautious about hiring people in the context of global growth, the yen’s appreciation and uncertainty surrounding electricity supply” stemming from the shutdown of nuclear reactors since the disaster, he said.
Exporters are struggling with a yen hovering around a record high against the dollar, which caused Japan to last year post its first annual trade deficit since 1980. NEC said Jan. 26 it would eliminate 10,000 jobs, with 7,000 of those positions in Japan.
The job-to-application ratio, which Murashima said he sees as a “better” indicator given Japan’s aging population, improved to 71 positions open for every 100 candidates from 69 in November, the government said.
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