The labor force shrank in August to its smallest size since October 1987, when the Nikkei 225 average was 185 percent higher and land prices were 85 percent greater than Friday.

Employers cut payrolls by 160,000 and a further 200,000 workers retired or abandoned efforts to find a job, leaving the seasonally adjusted number of employed at 59.4 million, the Statistics Bureau said Friday.

Separate figures showed industrial production rose 0.8 percent from the previous month, less than all but three of 28 forecasts in a Bloomberg survey.