November 1, 2019
TOKYO (Reuters) – Japan’s September jobless rate climbed from near 30-year lows and job availability slipped, government data showed on Friday, suggesting the nation’s tightest jobs market in decades may be reaching its peak.
Japan’s ageing and declining population has led to a tight labour market. But wage increases remain weak and companies are wary of passing on more of their profits to employees due to uncertainty over the economic outlook.
That has thwarted policymakers’ hopes of creating an expansionary impulse in the sluggish economy, where higher pay drives up consumer spending and ultimately inflation.
The seasonally adjusted unemployment rate rose to 2.4%, compared with economists’ median forecast of 2.3%, figures from the Ministry of Internal Affairs and Communications showed.
The unemployment rate stood at 2.2% in July and August, the lowest since 1992.
The jobs-to-applicants ratio fell to 1.57 in September, and compared with the median forecast of 1.59, data from the health ministry showed.
The ratio had stayed at an over 40-year high of 1.63 from late last year through to early this year.
The Bank of Japan kept monetary policy steady on Thursday as expected but gave the strongest signal to date that it may cut interest rates in the near future, underscoring its concern that overseas risks could derail a fragile economic recovery.
BOJ Governor Haruhiko Kuroda also said wages are not rising much despite a tightening labour market.
Slowing global demand and the escalating U.S.-China trade war have hurt the export-reliant economy, while a sales tax increase in October has fuelled concerns of a drop in domestic consumption in coming months.
(Reporting by Yoshiyasu Shida, writing by Kaori Kaneko; Editing by Kim Coghill & Shri Navaratnam)