Japan presents positive employment market after 11-month stagnation

A decline in the jobless rate and the positive impact of significant wage increases implemented by major organisations has created a favourable employment situation in Japan, according to the latest monthly assessment of the economy by the government.

June’s assessment marks the first time in 11 months that the Japanese government has upgraded its assessment of the employment situation, after describing the employment situation as “picking up” this May.

While maintaining an overall assessment of the economy as “recovering moderately”, the government remains cautious about potential risks such as a global economic slowdown, price increases, and financial market volatility.

One of the key factors contributing to the improved employment trends is the decrease in Japan’s jobless rate in April compared to the previous month. This decline has been attributed to the post-pandemic economic recovery and the ongoing labour shortages experienced by Japan.

READ MORE: Japan focuses on accelerating wage growth in fiscal 2023

During annual labour talks, major organisations in Japan pledged to implement the most substantial wage hikes in approximately three decades for the current fiscal year. Although there may be a time lag before these wage increases are fully reflected in salaries, some organisations have already initiated the process.

According to Prime Minister Fumio Kishida’s government sustaining wage growth is important to strengthen households’ purchasing power, a crucial factor in promoting economic growth, and has pledged to utilise all available policy tools to ensure wage growth, reported Reuters.