Japan's Unemployment Rate Unexpectedly Falls to 5.0%

Japan’s unemployment rate unexpectedly fell in September as payrolls rose, signaling that the job market may be improving even as the economy is threatened by an advancing yen.

The report is one of few bright spots in Japan’s economy after data this week suggested that demand both at home and abroad is waning. Prime Minister Naoto Kan’s Cabinet approved a 5.1 trillion yen ($63 billion) stimulus package to protect the slowing economy from the advancing currency. The new stimulus is aimed at helping small businesses and local governments cope with the strengthening yen.

Retail sales and exports grew at the slowest pace this year in September, and the Bank of Japan said the economy will slow in the latter half of this fiscal year and there will be some lingering effects of the yen’s appreciation” next year.

Renesas Electronics Corp. is among businesses still cutting staff. The semiconductor maker plans to cut 1,200 jobs through early retirement, Renesas said this week. The company also lowered its revenue forecast for the year ending March 2011, saying that its semiconductor sales in the second half of the fiscal year is likely to stall because of the stronger yen.

The job-to-applicant ratio rose to 0.55 in September, meaning there are 55 job openings for every 100 candidates, the Labor Ministry said in a separate report today. In a sign hiring may pick up, there were 91 newly advertised jobs in September for every 100 people who started looking for work that month, the most since January 2009.


TradingEconomics.com, Bloomberg
10/31/2010 6:31:54 AM