Japan Dec jobless rate falls to lowest since '97

Tokyo

JAPAN'S unemployment rate fell last month to its lowest level since 1997, while job availability rose to its highest level in 22 years as labour markets continued to tighten at an increasingly rapid pace, pointing to upward pressure on wages and inflation.

Even though the economy as a whole has been slow in picking up, labour shortages are becoming acute in a number of sectors such as construction and service industries, putting upward pressure on wages in parts of the economy. This pressure is expected to become more intense and widespread from March onwards as the country's business in general responds to strong pressure from the government and labour unions to raise basic pay scales in the world's third-largest economy. That in turn, analysts say, should put upward pressure on inflation, which is running at only half the target level of 2 per cent annually.