JAPAN’S September jobless rate climbed from near 30-year lows and job availability slipped, government data showed Friday, suggesting the nation’s tightest jobs market in decades may be reaching its peak.

Japan’s aging and declining population has led to a tight labor market. But wage increases remain weak and companies are wary of passing on more of their profits to employees due to uncertainty over the economic outlook.

That has thwarted policymakers’ hopes of creating an expansionary impulse in the sluggish economy, where higher pay drives up consumer spending and ultimately inflation.

The seasonally adjusted unemployment rate rose to 2.4 percent, compared with economists’ median forecast of 2.3 percent, figures from Japan’s Ministry of Internal Affairs and Communications showed.

The unemployment rate stood at 2.2 percent in July and August, the lowest since 1992.

The jobs-to-applicants ratio fell to 1.57 in September, and compared with the median forecast of 1.59, data from the health ministry showed.

The ratio had stayed at an over 40-year high of 1.63 from late last year through to early this year.

“The employment environment remains favorable as domestic demand is solid and there is also a labor shortage,” said Yusuke Shimoda, senior economist at Japan Research Institute.

“But there are worries about corporate profits due to the Sino-U.S. trade frictions. So the pace of improvement in the jobs market may be slowing down.”

The jobless data also showed that the number of those looking for a job rose by 90,000 in September to 420,000 from August.

“There are more people who want to work,” said a government official.

The Bank of Japan kept monetary policy steady Thursday as expected but gave the strongest signal to date that it may cut interest rates in the near future.

(SD-Agencies)