Japanese unemployment just fell to the lowest level since 1997

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Japan’s unemployment rate, having risen to a high of 5.5% in the wake of the global financial crisis, has fallen to a fresh multi-decade low in April.

Unemployment fell to just 3.3%, below the 3.4% level recorded in March, the lowest seen since May 1997.

Not only was the figure below the 3.4% rate expected, it came despite the labour force participation rate rising 0.3% to 59.4%.

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Consistent with the unemployment figure, the jobs-to-applicants ratio rose to 1.17 from 1.15 in March. In other words, for each person seeking work, there are currently 1.17 positions available.

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Not only is that a sign that the labour market is tightening, something that can only assist in building wage pressures, the figure was the highest seen since March 1992.

While Japanese inflationary pressures remain incredibly subdued at present – core CPI rose just 0.3% in the 12 months to April – with figures like this it appears only a matter of when, not if, inflation will accelerate.