October 5, 2025 | 07:48 pm
TEMPO.CO, Jakarta - Japan's unemployment rate in August 2025 rose to 2.6 percent, its highest level in 13 months. As reported by Japan Today, the national jobless rate increased from 2.3 percent in the previous month. This figure, released in government data on Friday, October 3, 2025, matches the rate recorded in July of last year and marks the first worsening of the rate in five months.
The number of individuals who voluntarily resigned from their positions increased by 13.2 percent from the prior month, totaling 770,000.
Meanwhile, the job availability ratio, a key measure of demand, fell for the first time in two months, decreasing by 0.02 points from July to 1.20. This decline suggests many companies are reducing recruitment, citing an inability to offer higher wages.
Data from the Ministry of Health, Labor, and Welfare shows the job-to-applicant ratio means there are 120 job openings for every 100 job seekers. However, the total number of employed individuals decreased by 0.3 percent on a seasonal basis to 68.1 million.
The Ministry of Internal Affairs and Communications reported a 9.1 percent increase in unemployed individuals, reaching 1.79 million, with those laid off rising by 19.4 percent to 430,000.
"The strong labor market might be starting to lose some steam," said Masato Koike, senior economist at the Sompo Institute Plus, as cited by NDTV.
He pointed to factors like U.S. import tariffs, which initially reduced part-time job openings but are now starting to affect full-time employment as well.
Impact of Rising Wages
This comes after Japan's largest companies promised wage increases of over 5 percent earlier this year in annual labor negotiations, the steepest hike in over three decades. The national minimum wage has also increased.
"The sharp rise in the minimum wage has created upward pressure on pay beyond what the market would typically dictate. This could end up having a negative impact on the labor market overall," said Koike from Sompo.
The chronic labor shortage remains a serious threat to businesses. According to Tokyo Shoko Research, 237 companies filed for bankruptcy between January and August this year due to labor shortages, an increase of about 22 percent year-on-year. Many cited the inability to meet continuously increasing wage demands.
Foreign Worker Debate
As a result, many companies are increasingly turning to foreign workers. As of October last year, 2.3 million foreign workers were recorded in the Japanese labor market, filling vacancies left by a declining domestic workforce.
The increasing presence of foreign residents and the inflow of tourists has become a major political issue. All five candidates in the leadership election for the ruling Liberal Democratic Party (LDP), including frontrunners Shinjiro Koizumi and Sanae Takaichi, have called for stricter regulations regarding foreign nationals.
"Public opinion may make it difficult to actively open the door to more foreign workers, but there's also strong demand from industry," said Koike. "The outcome of the upcoming LDP leadership race may influence the direction, but it's likely that the country will move at least to some extent toward accepting more foreign labor."
Editor’s Choice: Trump Proposes Further Changes to H-1B Visa Process
Click here to get the latest news updates from Tempo on Google News
Jorge Martin Set to Skip Indonesian MotoGP After Collarbone Injury
4 hari lalu
Defending champion Jorge Martin continues to be plagued by injury issues in MotoGP 2025.
Prabowo Concludes Four-Nation Tour, Touting UN Success and Trade Deals
7 hari lalu
Upon his arrival in Jakarta, Prabowo claimed the international visits had yielded several important achievements for Indonesia.
Indonesia Becomes Japan's 11th Largest Source of Foreign Visitors
8 hari lalu
Between January and July 2025, Japan welcomed 24.9 million international visitors, including 373,600 Indonesians, the 11th-largest group.
Why Travelers Leave Suitcases in Japanese Hotels and Airports
12 hari lalu
A total of 816 abandoned suitcases were reported at Kansai Airport, and approximately 700 were reported at Narita Airport.
Three Asian Nations That Have Not Recognized Palestine
13 hari lalu
A number of nations have yet to recognize Palestine, with three of them from Asia.
Japan to Forgo Palestine Recognition at UN General Assembly
15 hari lalu
The Japanese government has announced that it does not intend to recognize Palestine at the upcoming UN General Assembly meeting in New York.
Prabowo Heads to New York for UN General Assembly
15 hari lalu
Prabowo will be there until September 23. His main agenda is to attend a special session on the Two-State Solution.
US, South Korea, Japan Stage Drills Amid North's Rising Threat
18 hari lalu
The United States, South Korea and Japan are holding air and naval exercises off a South Korean island. Pyongyang has condemned it.
Japan to Fine Citizens Riding Bicycles Without Brakes 5,000 Yen
21 hari lalu
The Japanese police have released a guidebook on fines and penalties for cyclists who violate the rules.
Japan's Ambassador Visits Papua's Biak to Monitor Children's Nutrition Program in Tandem with UNICEF, BGN
24 hari lalu
Japanese Ambassador to Indonesia Masaki Yasushi, along with representatives from UNICEF and BG,N visited Biak, Papua today, September 11, 2025.
