Over-employment at Japanese firms on the way out

The employment component of the Tankan provided some welcome good news in an otherwise lacklustre survey. The employment index fell to its lowest level in four years, indicating that Japanese firms have now eliminated much of the over-employment that has dogged them since the global financial crisis. However, the headline result masks a growing disparity between the manufacturing sector, which is still suffering from over-employment, and the non-manufacturing sector, which is increasingly short of workers.