• Kyodo


The unemployment rate rose by 1 percentage point to 4.2 percent in December, as the stronger yen and global economic slowdown prompted manufacturers to cut their workforces to the lowest level in over 50 years, the government reported Friday.

Reflecting weak exports and industrial output, the number of employees in the manufacturing industry fell by 350,000 from a year earlier to 9.98 million, dipping below the 10 million mark for the first time since June 1961, data released by the Internal Affairs and Communications Ministry showed.

At a news conference, labor minister Norihisa Tamura said “the Cabinet as a whole has to consider” how to grapple with the continued hollowing out of the nation’s industry.

Behind the manufacturing sector’s decline was a shift by domestic companies to overseas production bases because the yen’s value against other key currencies has remained higher than projected and international competition is intensifying, in addition to the major slump electronics companies are experiencing, analysts said.

In December, the ranks of the employed shrank by 380,000 to 62.28 million, down for the second straight month. At the same time, the number of unemployed people decreased by 170,000 to 2.59 million, according to the ministry.

Of this total, those who lost their jobs because of employers’ decisions to let them go climbed by 20,000 to 710,000, while those who said they began searching for work to boost their income, among other reasons, fell by 130,000 to 850,000.

The government expects the rejuvenation measures to add around 2 percentage points to the country’s real gross domestic product and create at least 600,000 jobs.

With concerns over the yen’s excessive appreciation receding in recent months, some data have shown signs that Japan’s export-reliant economy could begin to pick up again.

Meanwhile, data compiled by the Health, Labor and Welfare Ministry showed job availability in December improved for the first time in five months, as the ratio of job offers to seekers rose to 0.82 from 0.80 in November. The figure means 82 positions were available for every 100 job seekers.

For the whole of 2012, the unemployment rate fell 0.3 percentage point to an average 4.3 percent, dropping for the second straight year, while job availability also improved for the third year in a row, according to the data.