Japan's unemployment is stuck at 5.4%

Industrial output enjoyed its strongest rise in a year while the unemployment rate held steady.

Strong demand for electronic products, especially from the US, helped push Japan's industrial output 2.5% higher in May.

And, while the overall unemployment figures were unchanged at 5.4%, analysts said the tide of job losses in the manufacturing sector was easing.

"The upward pressure on male unemployment seems to have ended as manufacturers have finished massive restructuring programmes," Shun Maruyama, an economist at UFJ Institute, said.

The Japanese economy is heavily dependent on exports to the US and was sent back into its long, drawn-out recession as the US economy slowed.

Deflation pressure

A solid US rebound in consumer spending will lift Japan's chances of exporting its way back to economic growth.

Despite the new hope in US consumer spending, Japanese customers are still tightening their purse strings.

Consumer prices fell by 0.2% in May and the country is suffering from a protracted period of deflation that is likely to harm growth prospects.

Also on Friday, Japan's Cabinet approved the annual economic reform plan to trim government spending and boost the performance of companies.

But critics were already saying that the reforms did not go far enough to.