The nation's seasonally adjusted jobless rate was 5.3 percent in June, edging down 0.1 percentage point from the previous month, the government said in a preliminary report released Tuesday.
But the employment outlook remained unclear as companies continue to shed jobs and excess capacity.
The nation's unemployed numbered some 3.61 million in June, down 70,000 from a year earlier for the first decline in four months, the Public Management, Home Affairs, Posts and Telecommunications Ministry said.
Some 64.11 million had jobs in June, up 380,000 from May for the second month of increase, it said. The upturn in May was the first in 26 months.
"The employment situation continues to be severe," Prime Minister Junichiro Koizumi told a news conference. "But there are some bright signs, such as the increase in the number of employed."
Economic and fiscal policy minister Heizo Takenaka also called the rise in workers "a good sign" for the economy.
"But there is no change in the fact that the job market remains severe," he said. "We will continue to make efforts to create jobs through the implementation of reforms."
The unemployment rate has been hovering between 5.2 percent and 5.5 percent, the nation's postwar record high, for mote than 20 months.
In June, the jobless rate for men rose 0.1 percentage point from May to 5.7 percent. But the overall rate dropped because that for women fell 0.3 point to 4.8 percent.
The fall in the rate for women was mainly due to an 8.5 percent increase in the number of employees in the medical services and welfare sector. About 70 percent of workers in that sector are women.
The June data underscored the continuing trend for companies to lay off workers.