Japan's biggest export market is the US

The figures underlined the task facing the country's new central bank governor.

The jobless rate reached 5.5% in January compared with a revised 5.3% in December.

There was some positive news - industrial production rose by 1.5% over the month but that was after four months of decline.

"Job conditions continue to be severe," said Economics Minister Heizo Takenaka.

"Personal consumption is weak but industrial production came in positive. The economy remains on a plateau."

Electronic demand

Companies have been cutting costs and jobs in response to stagnant demand at home.

The country has been looking to exports to lead the recovery.

But Japan's biggest market, the United States, has suffered its own economic slowdown and is now affected by concerns about war with Iraq.

The rise in output was led by electric machinery, personal computers, liquid crystal displays and mobile phones.

But economists said that despite the growth in production any recovery was still weak.

"I would suspect the rise in January was a kind of bounce after four straight months of decline," said Peter Morgan, senior economist at HSBC Securities Japan.

" I wouldn't say that this is a turnaround yet."

The task ahead

Separate figures showed that deflation was still a problem.

Japan's consumer price index fell for the 40th month in a row in January, dropping 0.8% from a year ago.

It is just one of the problems the newly nominated Bank of Japan Governor Toshihiko Fukui will have to grapple with when he takes over the job in March.