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Japan's July jobless rate falls to 2.8%, down for 2nd straight month

People wearing face masks to protect against the spread of the coronavirus walk at Yokohama train station in Yokohama near Tokyo, on Aug. 18, 2021. (AP Photo/Koji Sasahara)

TOKYO (Kyodo) -- Japan's unemployment rate fell to 2.8 percent in July, down for the second straight month, despite a resurgence of coronavirus infections and a fourth state of emergency declared for Tokyo over the virus, government data showed Tuesday.

    The seasonally adjusted jobless rate fell from 2.9 percent in June, which had also seen a 0.1 percentage point drop from the previous month, according to the Ministry of Internal Affairs and Communications said. But the level is still higher than the 2.4 percent registered in February last year when the Japanese economy had yet to see significant fallout from the pandemic.

    Separate data from the Ministry of Health, Labor and Welfare showed that the job availability ratio in July increased to 1.15 from 1.13 a month earlier, rising for the second month in a row, meaning that there were 115 job openings for every 100 job seekers. It had gained 0.04 point in June.

    A surge in new infections driven by the highly contagious Delta virus variant forced the government to issue the latest coronavirus state of emergency for Tokyo in mid-July, only three weeks after the third emergency was lifted for the capital.

    It joined Okinawa as the two regions of Japan under an emergency declaration during July. The southern island prefecture's virus emergency was declared in late May.

    Under the declaration, people are asked to stay home and restaurants and bars to refrain from serving alcohol and close by 8 p.m. However, some eateries have defied the latest request, serving alcohol and returning to regular business hours.

    "I don't think we can say that the number of infections and the jobless rate showed a clear correlation this time," a government official told reporters. "Having said that, the virus impact remains, and we have to monitor it closely."

    The July survey shows that the number of unemployed stood at 1.90 million, dropping 120,000 from June and down for the second consecutive month. Among the total, 700,000 people voluntarily left their jobs, down 90,000, while 570,000 were laid off, up 10,000, and 480,000 were new job seekers, down 20,000.

    The number of people in work rose 420,000 from the previous month to 67.08 million, increasing for the second successive month.

    "The third emergency was lifted for Tokyo and several areas in June, and I believe its effect appeared in July and led to the second monthly improvements both in jobless rate and job availability, which are lagging indicators of the state of the economy," said Yuriko Shimanaka, an economist at Mizuho Research & Technologies.

    The government has repeatedly extended and expanded the ongoing fourth emergency, now covering 21 out of Japan's 47 prefectures, and is set to last until Sept. 12, clouding the outlook for the employment environment.

    Given the situation over the fourth emergency and the spread of the Delta variant, Shimanaka says the improvement in job markets will be a "temporary" move.

    "The impact of the virus emergency might have become smaller on the economy and the labor market, but undoubtedly it remains a negative factor, so the indices could begin to worsen again in August," Shimanaka said.

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