Slight drop in jobless rate surprises Japan

Bloomberg News Service

Japan's jobless rate unexpectedly fell in February and spending by salaried workers rose for a third month, giving investors some respite from a flow of bad news.

Unemployment fell to 4.7 percent last month, the government's statistics bureau said. Economists had expected the rate to remain at a record high 4.9 percent.

A separate report showed that spending by households headed by a salaried worker rose a better-than-expected 3.1 percent last month from January.

Today's reports may just be a breather from the run of bad news — highlighted this month by a decline in the benchmark Nikkei 225 stock index to a 16-year low and the central bank's assessment that the recovery has stalled as exports slow.

On Monday, the central bank's Tankan survey is expected to show the first drop in business confidence in two years.

Not all the news yesterday was good. The number of jobs available for applicants at government-run work centers fell for the second straight month. There were 64 jobs for every 100 applicants, down from 65 in January.

The number of "jobs on offer is declining as production keeps falling," said Susumu Okano, chief economist at Daiwa Institute of Research Ltd.