Japan's jobless rate jumps but economy expected to recover next year

Today's data on the Japanese economy look gloomy. Bloomberg reports:

The jobless rate rose to 4.8 percent from 4.4 percent in February, the biggest jump since 1967, the government statistics bureau said in Tokyo today. Prices excluding fresh food slid 0.1 percent from a year earlier...

Spending by households slid 0.4 percent, capping off the worst losing streak since comparable data were first made available in 1964.

Despite today's reports, however, the Japanese economy may actually bottom soon. From Bloomberg yesterday.

The Bank of Japan said the world’s second-largest economy will resume growing in 2010 after shrinking 3.1 percent this fiscal year.

Gross domestic product will expand 1.2 percent in the year starting April 2010, compared with its January estimate of a 1.5 percent gain, the central bank said in its semiannual outlook today in Tokyo. The current fiscal year’s contraction will be steeper than the 2 percent predicted three months ago.

Japan has been pummeled by a collapse in exports since last September, yet signs are emerging that the worst of the recession may be over. The policy board said the global economy is showing a “leveling out” and Japan will “recover at a moderate pace” from the latter half of this fiscal year...

Governor Masaaki Shirakawa and his board kept the benchmark overnight lending rate at 0.1 percent earlier today and refrained from expanding a program of purchasing corporate and government debt, a policy it has been pursuing to channel funds to companies and spur a recovery.

Yesterday's economic reports had also provided reasons for optimism.

Figures for March indicate the recession is easing. Factory production rose 1.6 percent from February, the first gain in six months... Companies plan to boost output again in April and May as they replenish inventories, the report showed.

In another sign of improvement in manufacturing, the Nomura/JMMA Japan Manufacturing Purchasing Managers Index (PMI) rose to 41.4 in April from 33.8 in March, the largest gain since data were first compiled in October 2001.