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April job availability best since July 2008

Kyodo

Job availability improved in April to its best level in four years and nine months, as some companies became willing to hire more workers in expectation of an economic recovery, helping to keep the unemployment rate relatively low at 4.1 percent, the government said Friday.

The ratio of employment offers to job seekers climbed for the second straight month to 0.89 in April from 0.86 the month before, meaning 89 positions were available for every 100 job seekers, according to the Health, Labor and Welfare Ministry.

It was the highest level since July 2008, before the global financial crisis was triggered that September, the ministry said.

The unemployment rate remained flat at 4.1 percent in the reporting month, the Internal Affairs and Communications Ministry said. In March, the rate dropped 4.3 percent from the month before, its lowest level since November 2008.

The results suggest that Prime Minister Shinzo Abe’s economic policies centering on drastic monetary easing and mastsive fiscal spending are gradually rippling through the real economy.

“As the depreciation of the yen has increased hopes that a recovery in exports would boost corporate performance across the board, the labor market is likely to continue to improve,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

With the Bank of Japan pledging to implement bold credit easing steps to achieve a 2 percent inflation target within two years, the yen fell against the dollar by 16.6 percent from a year earlier in April.

A falling yen supports exporters by making Japanese products cheaper abroad and increasing the value of overseas revenue in yen terms.

An official at the internal affairs ministry expressed optimism about the job market, saying it has been picking up, given that the ranks of the unemployed decreased in April.

Health, Labor and Welfare Minister Norihisa Tamura told a news conference that the government will continue to promote employment measures.

In January, Abe’s government endorsed an economic stimulus package entailing ¥10.3 trillion in central government funds in an attempt to add around 2 percentage points to real gross domestic product and create at least 600,000 jobs.

The outlook for the economy, however, has become uncertain, as some economists say the BOJ’s aggressive easing has triggered a large-scale inflow of money into financial markets, causing recent volatility in Japan’s stock and sovereign debt markets.

A surge in government bond yields could lead to rises in interest rates for housing loans and corporate borrowings, sparking anxiety that it may impede an economic recovery. Abe acknowledged last week that a spike in Japan’s long-term interest rates could weigh on the economy, saying during a Diet session that it would “greatly affect the economy, public finances and the people’s lives.”

In April, the number of unemployed fell 240,000 from a year earlier to 2.91 million, while the number of those with jobs increased 370,000 to 63.12 million, the internal affairs ministry said in a preliminary report.

By industry, retail and wholesale services as well as education added jobs, whereas manufacturing- and consumer-related businesses such as entertainment reduced payrolls, it said.

Industrial output up 1.7%

Industrial production advanced 1.7 percent in April from the previous month for the fifth consecutive monthly rise, with the weaker yen boosting the exports of transport equipment makers, the Economy, Trade and Industry Ministry said Friday.

But the ministry maintained its basic assessment that production has shown “signs of picking up at a moderate pace” partly because a forecast survey indicated there may be a pause in the future rise in the index of output at factories and mines.

The seasonally adjusted index stood at 91.9 against the base of 100 for 2005, according to its preliminary report.

“We are seeing production picking up moderately amid a recovery in exports,” a ministry official said.

By sector, production by transport equipment makers jumped 11.8 percent, helped by firm demand for cars in North America. Electronic parts and devices saw a 2.3 percent increase in output.

Among the losers were the information and communication electronics equipment sector, which plunged 20.5 percent, and general machinery makers, down 2.8 percent.