— See Separate Table For Details of Individual Forecasts

TOKYO (MNI) – Japan’s seasonally adjusted unemployment rate is
expected to remain unchanged at 5.0% in October, while the ratio of job
offers to job seekers is projected to have edged up to 0.56 in October
from 0.55 in September, according to the median forecast of analysts
surveyed by Market News International.

Economists forecast that the recent labor market improvement is
expected to pause for a while because possible falls in automobile
output in October-December are likely to make some firms cautious about
hiring additional workers.

The Ministry of Internal Affairs and Communications will release
the unemployment rate and the Ministry of Health, Labor and Welfare will
release the ratio of job offers to job seekers, both on Tuesday, Nov.
30.

The September jobless rate of 5.0% was below the record high of
5.6% hit in July 2009, but still well above the 4.2% rate seen at the
start of 2009.

The Japanese economy has moved out of the sharp contraction seen
early last year, but the jobless rate is a lagging indicator that
typically follows economic movements after a delay of several months.

The ratio of job offers to job seekers, seen as a coincident
indicator of the economy, has been gradually improving, after hitting a
record low of 0.42 in August 2009 (meaning there were only 42 job offers
for every 100 seekers at government placement offices).

The ratio has stayed far below a recent high of 1.08 marked in July
2006, when the economy was in the middle of the longest post-war
expansion period that began in February 2002 and ended in October 2007.

Takehiro Sato, chief economist at Morgan Stanley MUFG, forecast the
ratio of job offers to job seekers will mark time temporarily as auto
production is being cut significantly in Q4.

Automobile sales declined 23.2% on-year in October, after a 1.2%
fall in September and a robust 37.7% gain in August, as the government
ended subsidies for promoting purchases of energy-efficient vehicles in
September.

Mitsumaru Kumagai, senior economist at Daiwa Institute of Research,
said, “Labor conditions have already moved out of the worst phase.”

But he added that creation of new positions may not be easy as
firms have held excess workers on their payrolls by applying for
subsidies.

Looking ahead, Takumi Tsunoda, senior economist at Shinkin Central
Bank, said, “Employment conditions are likely to continue moving one
step forward and one step back for a while due to excess employees that
companies are holding.”

skodama@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4838 **

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