Japan Unemployment Rate Rises to 4.2% in December

Japan's jobless rate has increased to 4.2 percent in December, blocking the country's ongoing efforts to tackle the economic slowdown under the new leadership of Shinzo Abe.

The Ministry of Internal Affairs and Communications said that the unemployment rate rose to a seasonally adjusted 4.2 percent in December from 4.1 percent in November, although economists had expected it to remain unchanged.

The number of employed persons in December was 62.28 million, a decrease of 0.6 percent on a year ago. The job-to-applicant ratio rose to 0.82 in December from the previous month's ratio of 0.80, meaning 82 positions are available for every 100 job seekers at present.

The participation rate declined to 58.5 percent from 58.9 percent a year earlier.

Despite the rise in December, the unemployment rate declined from 4.6 to 4.3 percent for the entire 2012 period, marking two straight years of improvement.

The December data comes after Japan's new government under Prime Minister Shinzo Abe unveiled a huge stimulus plan to increase the number of jobs and end years of deflation in the country.

The continuing deflation and weak external demand have affected the Japanese economy, dragging it into recession as revealed by the revised official figures showing that growth contracted for two straight quarters.

In order to spur growth in the economy, Japan's central bank hiked its inflation targets to 2 percent and announced a US Federal Reserve-style open ended asset purchase programme, which is scheduled to start next year.

Due to sluggish employment conditions which have hurt consumer sentiments, Japan's retail sales increased at a slower pace in December compared to the previous month.

The ministry also said that the average monthly consumption expenditure in households of two or more people declined 0.7 percent year-on-year to 325,492 yen ($3,528, £2,223) in December, missing forecasts for a decline of 0.2 percent following a rise by the same amount in November.

The average monthly income per household stood at 902,928 yen, up 1.1 percent year-on-year, while the average consumption expenditure rose 2.2 percent to 359,482 yen year-on-year.