The seasonally adjusted jobless rate fell 0.1 percentage point from 2.9 percent in June, according to the Ministry of Internal Affairs and Communications (MIC) said. However, the level is still higher than the 2.4 percent logged in February last year, when the Japanese economy had yet to experience major fallout from the COVID-19 pandemic.
According to separate data from the Ministry of Health, Labor and Welfare, the job availability ratio in July increased to 1.15 from 1.13 in the previous month, up for the second month in a row, meaning that there were 115 job openings for every 100 job seekers. The ratio had risen 0.04 point in June.
Due to a surge of new infections driven by the highly contagious Delta variant, the Japanese government declared the latest COVID-19 state of emergency for Tokyo in mid-July, only three weeks from the end of the third emergency for the capital.
Adding to the capital, Okinawa was also under a state of emergency during July. The southern island prefecture's virus emergency was declared in late May.
Under the emergency declaration, people are asked to stay home, while restaurants and bars are requested not to offer alcohol and close by 8:00 p.m. local time.
"I don't think we can say that the number of infections and the jobless rate showed a clear correlation this time," a government official told reporters. "Having said that, the virus impact still remains and we have to monitor it closely."
The July survey shows that the number of unemployed stood at 1.9 million, dropping 120,000 from June and down for the second straight month. Of the total unemployed people, 700,000 voluntarily left their jobs, 570,000 were laid off, and 480,000 were new job seekers.
The number of people in work increased 420,000 from the previous month to 67.08 million, rising two months in a row.
Yuriko Shimanaka, an economist at Mizuho Research & Technologies, said, "The third emergency was lifted for Tokyo and several areas in June, and I believe its effect appeared in July and led to the second monthly improvements both in jobless rate and job availability, which are lagging indicators of the state of the economy."
Shimanaka thinks the improvement in job markets is a "temporary" move since 21 out of Japan's 47 prefectures are under a state of emergency, and the highly contagious Delta variant has spread across the country.
"The impact of the virus emergency might have become smaller on the economy and the labor market, but undoubtedly it remains a negative factor, so the indices could begin to worsen again in August," Shimanaka said.
Latest comments