Japan's Unemployment Rate Unexpectedly Falls to 5.3%
Oct. 30 (Bloomberg) -- Japan’s jobless rate unexpectedlydropped to a four-month low in September, adding to signs thata recovery in the world’s second-largest economy is spreadingto consumers.
The unemployment rate fell to 5.3 percent from 5.5 percentin August, the statistics bureau said today in Tokyo. Themedian estimate of 29 economists surveyed by Bloomberg was foran increase to 5.6 percent and only one person predicted a drop.
Stocks rose, building on a global rally spurred by areport that showed the U.S. economy expanded for the first timein a year. The Bank of Japan will probably consider allowingits corporate-debt purchases to end in December at a meetingtoday, as central banks around the world start phasing outemergency measures taken at the height of the financial crisis.
“These numbers are much stronger than expected,” saidMasamichi Adachi, senior economist at JPMorgan Chase & Co. inTokyo. “Employers who earlier thought they couldn’t survivewithout cutting more jobs are now thinking that those cuts maynot be that necessary. People aren’t fully relieved, but thepanic is over.”
The yen traded at 91.31 per dollar at 11:22 a.m. in Tokyofrom 91.47 before the report was published. The Nikkei 225Stock Average advanced 1.3 percent to 10,015.28.
Job Prospects Improve
A separate report showed the job-to-applicant ratio, aleading indicator of employment trends, improved for the firsttime in more than two years. The ratio rose to 0.43 last monthfrom a record low of 0.42 in August, meaning there are 43 jobsfor 100 job seekers. Household spending climbed 1 percent froma year earlier, the statistics bureau said.
The figures added to evidence that the recovery fromJapan’s worst postwar recession may be sustained. Data releasedearlier this week showed industrial production and retail salesin September exceeded economists’ expectations.
Manufacturers increased output for a seventh month,extending the longest stretch of gains in 12 years. Honda MotorCo., Japan’s second-largest carmaker, almost tripled its full-year profit forecast as government stimulus measures boosteddemand, the company said this week.
“Production is slowly increasing. That means that the jobmarket is probably not going to get much worse,” said ToruShimano, head of economic research at Okasan Securities Co. inTokyo. “Things are less bleak than they were, but it’s stilltoo early for optimism.”
Global Pickup
The economy added jobs for a second month on a seasonallyadjusted basis. Manufacturers also cut jobs at a slower pace,according to year-on-year breakdowns provided by the government.
Japan’s largest overseas markets are showing signs ofpicking up. The U.S. economy expanded at an annual 3.5 percentrate last quarter after a yearlong contraction, and growth inChina accelerated to 8.9 percent, the fastest pace in a year.
Still, renewed demand has yet to spur hiring at allcompanies. Nomura Holdings Inc., Mitsubishi UFJ Financial GroupInc. and their biggest rivals plan to cut recruitment ofuniversity graduates in Japan next year.
Nomura, Japan’s biggest brokerage, plans to hire 500graduates, compared with 650 a year earlier. Mitsubishi UFJ’sbanking unit will take in 650 graduates, down from 1,500, thecompany said.
“We’re seeing a little bit of the light at the end of thetunnel,” said Yoshiki Shinke, a senior economist at Dai-IchiLife Research Institute in Tokyo. Nevertheless, “the recoveryis very, very weak and companies are still saying they have fartoo many workers, so we shouldn’t get ahead of ourselves.”
Wage Subsidies
Shinke said a government program providing wage subsidiesis also supporting the job market. He said firms have appliedfor aid on behalf of about 2 million workers.
Deflation is also weighing on paychecks, which may compelconsumers to cut spending in coming months. Core consumerprices, which exclude fresh food, tumbled 2.3 percent from ayear earlier, the statistics bureau said today.
“Japan’s economy continues to show signs of recovering onthe whole, but we need to be mindful about the risk of slippinginto deflation,” Deputy Prime Minister Naoto Kan told reportersafter today’s figures were published.
The Bank of Japan will probably forecast today thatconsumer prices will keep falling through fiscal 2011,signaling there will be little chance to raise interest ratesfor a year at least, economists said. The board members arelikely to stress they will have to keep borrowing costs at 0.1percent to bolster economic growth.
“The outlook report will likely warn that risks to theeconomy are still to the downside and core prices will remainbelow zero,” said Izuru Kato, chief market economist at TotanResearch Co. in Tokyo. The report will help to quash anyinvestor expectations that rates may rise soon, he said.
To contact the reporter on this story:Toru Fujioka in Tokyo at tfujioka1@bloomberg.net
Last Updated: October 29, 2009 22:26 EDTSource: Bloomberg
« Back to Business News
Related News
-
Japan's Unemployment Rate Unexpectedly Falls to 5.3% Oct 30, 2009 @ 07:15 AM
Oct. 30 (Bloomberg) -- Japan’s jobless rate unexpectedlydropped to a four-month low in September, adding to signs thata recovery in the world’s second-largest economy is spreadingto consumers.
-
Dollar Falls for Fourth Month Against Euro; US Growth Aids Risk Demand Oct 30, 2009 @ 07:15 AM
Oct. 30 (Bloomberg) -- The dollar fell toward its fourthmonthly drop against the euro, the longest stretch since 2004,as the U.S.’s return to growth renewed optimism a globalrecovery will quicken, aiding demand for higher-yielding assets.
-
Asian and European Markets Lifted by Alcoa Oct 30, 2009 @ 07:15 AM
Markets rose on Thursday in both Europe and Asia after the earnings season in the United States got a better-than-expected start and the central banks in Europe kept rates unchanged.
-
Australia's Unemployment Falls, Driving Bets of Second Interest-Rate Rise Oct 30, 2009 @ 07:15 AM
Oct. 8 (Bloomberg) -- Australia’s jobless rate fell for thefirst time in five months as employment unexpectedly surged,driving the currency to a 14-month high as traders bet thecentral bank will raise interest rates again next month.
-
Nation's jobless rate falls slightly Oct 30, 2009 @ 07:15 AM
The U.S. unemployment rate edged down to 10 percent in November from 10.2 percent the month before, offering fresh evidence that the economy is stabilizing and that employers may soon stop shedding workers.
