Morning Forex Fundamental: JPY

Morning Forex Fundamental: JPY

We don’t need to be too pessimistic about the outlook' - Naoki Iizuka, an economist at Citigroup Inc.

The number of people out of work in the world’s third largest economy edged higher in the last month of 2012, 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 Thursday that the overall unemployment rate ticked up to 4.2% from November’s 4.1%, although economists had expected it to remain unchanged. The number of employed persons in December stood at 62.28 million, a decrease of 0.6% on a yearly basis. The report also showed that only 82 positions are available for every 100 job seekers at present. Tepid retail sales, less-than-expected growth of manufacturing sector and the increased level of unemployment, are adding to concerns that Shinzo Abe will have to introduce more bold actions soon in order to boost economic growth.

'We don't need to be too pessimistic about the outlook,' said Naoki Iizuka, an economist at Citigroup Inc. in Tokyo. "Production will probably return to a clear recovery track in the coming months.'

'Generating enough demand to create a sustained recovery has been an uphill battle for policymakers,' Moody's said in a commentary Thursday citing barriers to growth such as Japan's shrinking workforce and high savings rate.