Unemployment Rate In Japan Unexpectedly Increases In June

The Japanese economy issued today many date that showed the nation's export led recovery is losing steam, especially after the industrial production declined, in addition to the higher unexpected unemployment rate which surged for the seven months in June, means a hindering in recovery.

The Japanese economy issued the Industrial Production preliminary reading (MoM) which started inception during June, where the index declined by -1.5% compared with the pervious 0.1%, while analyst's forecasts referred to 0.2%.

Also Japan's Industrial Production preliminary reading (YoY) for the year ended in June, which came at 17%, compared with a previous of 20.4%, while the expectations estimated of 18.9%.

Today's report showed that the production may slow, after the exports which are the main pillar for the economy, rose at the slowest pace during this year in June. Also the planned expiry of Japanese government stimulus to purchase cars, may affect on production of Japanese companies, especially after the slower growth in China and U.S., which led to prompts companies to cut back.

Moreover, automakers are planning to reduce their production, Nissan which is one of the world's biggest carmakers and it's the third largest automakers in Japan, announced that it plans to cut its production by 20% in Japan. Toyota motor Corp. Plans to reduce production in upcoming period, and Honda Motor Co., may cut the domestic production by 3.5% in October of the yeah.

Analysts are indicating that the manufacturing slowdown may affect on the Japanese expansion slowed to an annual 1.9% during the second quarter of the year, from 5% in the first three months of the year.

On the other side, annualized Household spending reading during June released with actual of 0.5% compared with the pervious of -0.9%, while the expectation was -0.7%.

The Japanese economy released the jobless rate monthly reading during June which rose 5.3%, showing increasing compared with a previous reading with 5.2% in June, while the expectations referred to 5.2%.

Job to Applicant ratio for June also released with an actual reading of 0.52 after reaching 0.50 in the previous reading, while it's forecasted to be 0.50, meaning there are 52 jobs for every 100 candidates, as it reached the highest level in more than a year.

Today's reading for the unemployment rate which unexpectedly increased was supported by the increased labor wages, which led workers to work more hours in order to meet the increased demand.

The world's second largest economy continued to expand last quarter, but this expansion is at a slower pace as export growth moderated. Japanese companies are still rejecting to increase their personnel costs.

Today's report also showed that wages increased for three months, meaning the consumers may begin to spend on a wider array of goods and services, and not just cars and household appliances, where summer bonuses for large companies rose for the first time in three months. The retailers are putting new discounts to encourage spending among consumers.

Japan's Natl CPI excluding food and energy (YoY) during June, which came at -1%, comparing with a previous reading of -1.2%, while the expectations estimated of -1.1%.

The Japanese consumer prices index declined eased for the second month during June, and the improvements affected as stronger yen lowers imports costs. A strong yen hinders prices from rising, while the strong yen add more pressure on the BOJ to implement extra steps, including the expansion of a 20 trillion yen ($230 billion) fund-supply program.

Yet, the current economy's status might lead the government and monetary policy makers to find and work on a policy that keeps the financial market environment extremely accommodative, and to encourage local spending in order to support the nation's recovery and boost exports as well as unemployment rate