Japan's unemployment rate soared to a record high and core nationwide consumer prices marked their largest drop on record in May, government data showed today.
The figuresreinforce the view that Japan might be in recession.
The dismal data highlighted the tough task facing Prime Minister Junichiro Koizumi, who is to meet US President George W Bush at the weekend.
He willdiscuss his plans for painful but sorely needed structural economic reforms that could further exacerbate unemployment and deflation in the near term.
The figures came a day after the Bank of Japan (BOJ) decided not to ease monetary policy despite a string of indicators pointing to a second straight quarter of contraction for the world's second-largest economy. It shrank 0.2 per cent in the first three months of the year.
Hints that Japan could well be slipping into recession were highlighted in housing starts data, which marked its fifth straight decline in May, falling 0.2 per cent from a year earlier.
Orders received by 50 major construction companies dropped 17.9 per cent in May year-on-year, a seventh consecutive decline.
Government figures showed the jobless rate rising back up to a record 4.9 per cent in May, matching levels last seen at the beginning of this year.
Economists have said the jobs market could deteriorate further as lay-offs and bankruptcies speed up as a result of Mr Koizumi's reform plans, which include persuading banks to dispose of their bad loans and cutting government spending.