Japan's unemployment rate held steady at 2.6% in July, unchanged from June, data released by the Ministry of Internal Affairs and Communications showed on Tuesday, matching general expectations.

The data showed that the labor market remains insulated from any headwinds, at least for now, owing to the government’s employment adjustment subsidy.



The government is considering scaling down the subsidy from October.



The total number of employed people fell by 20,000 (0.0%) during July, after rising by 120,000 (+0.2% M/M) in June. Meanwhile, the number of unemployed people fell by 40,000 (-2.2% M/M) in July.



The job-to-applicant ratio, a leading indicator for the labour market, rose to 1.29 in July, up from the 1.27 seen in June, which represented the seventh straight monthly rise and equates to the highest level observed since April 2020, when it stood at 1.31.