As Prime Minister Shinzo Abe sees it, the tight labor market is a key success of his economic strategy: The unemployment rate is the lowest in 21 years and the job-to-applicant ratio is the highest in 25 years.
Analysis of data over a longer period indicates that the nation's aging and declining population is the driving force, and that while more than 1 million new jobs have been created since Abe came to power in late 2012, labor-market rules mean most of the change is in nonpermanent, lower-paying positions.
Hisashi Yamada, the chief economist at the Japan Research Institute, said that what he sees is a shrinking workforce, rather than something positive, such as growing demand.