Japan Unemployment: Points for Interpreting Report

Unemployment rate unexpectedly fell from 4.0 percent to 3.7 in October. However it might be another case showing single numbers, especially the headlines, usually give the least information about the state of the economy and may be even misleading.

Analysts believe that the fall in the unemployment rate reflects the disappointment from job-seekers when the disappointment itself may be just the sign that finding jobs has been increasingly difficult and this is far more consistent with other economic data that point to the recession in Japan.

As a supportive fact, the Job-to-Applicant ratio, which shows how plentiful the job opportunities are, fell to 0.80 at the same period; more than estimates and lowest since 2004.

Industrial Production also fell as much as 3.1 percent from September, showing that the recession might have been deepened. Exports negatively affected both from the sharp slowdown in global economic activity and the recent appreciation of the Japanese yen.

Japan is one of the major oil importers and it is reasonable to see the negative impact of weak economic data on oil prices. Following chart may show that relation.