By Tetsushi Kajimoto
TOKYO (Reuters) - Japan needs to consider extending a special subsidy aimed at helping companies hit by the coronavirus pandemic to keep furloughed workers on the payroll, an official from Japan's ruling Liberal Democratic Party (LDP) said late on Monday.
LDP's Fumio Kishida, who is seen as a candidate to become the country's next prime minister, made the remark after data last Friday showed job availability hit a near six-year low in June.
Japan's job market has been cooling and millions of people have been furloughed as the spread of the coronavirus forced businesses to close and people to stay home through May.
Policymakers are having to balance containing the virus with the need to resume economic activity as the world's third largest economy faces its first recession in 4-1/2 years. Japan's lockdown restrictions were lifted late in May.
"The job market remains severe when looking at figures such as the jobs-to-applicants ratio. We need to consider extending the special measure for employment adjustment subsidy," Kishida, LDP's head of policy affairs, told a news conference.
The special measure was designed to temporarily lift the payment to companies who keep employment to up to 15,000 yen (108.19 pounds) per employee per day from up to 8,330 yen previously, for six months through to the end of September.
Lawmakers worry that the end of the special measure next month could trigger a spike in job losses as many companies may not be able to keep surplus labour given dwindling profits.
A junior coalition ally, the Komeito party, also proposed on Friday that the government extend the special subsidy measure beyond September.
Some 2.36 million people were furloughed as of June, up 0.9 million from a year earlier, government data showed.
Azusa Kato, senior economist at BNP Paribas Securities, said the jobless rate could approach 4% from the current 2.8% by the end of the year.
(Reporting by Tetsushi Kajimoto; Editing by Ana Nicolaci da Costa)