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Number of jobless still rising in Japan

JAPAN'S jobless rate rose to a five-and-a-half year high in May, the government said yesterday, possibly delaying a recovery for the world's second-largest economy even as manufacturers enjoy a nascent rebound.

The unemployment rate jumped to 5.2 percent from 5 percent in April as the number of jobless rose to nearly 3.5 million.

On the positive side, household spending unexpectedly logged its first gain since January 2008, boosted by Japanese Prime Minister Taro Aso's multibillion dollar stimulus measures.

Investors should get a better idea of what's in store for Japan's economy from today's survey of business sentiment, which polls 10,000 businesses across the country. "If companies' sense of excess employment recedes, we think that the jobless rate will eventually stop rising," said Takuji Aida, an economist at UBS Securities in Tokyo.

Sentiment rising

The survey's headline sentiment index for large manufacturers is tipped to improve to minus 43 from a record low of minus 58 in March, according to an average forecast of 11 economists surveyed by The Associated Press. The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable.

The anticipated results would be encouraging and confirm that Japan's steepest recession since World War II is loosening its grip, analysts said. But they also cautioned against over-optimism.

Minus 43 "is still close to ones in the middle of past recessions," said Masamichi Adachi, an economist at JPMorgan Securities Japan.

Figures out yesterday showed average monthly household spending edged up 0.3 percent in May from a year earlier.


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