TOKYO (REUTERS) – Japan’s unemployment rate crept up and job offers slid in April, data showed on Friday, underscoring the pain the country’s prolonged battle with Covid-19 is inflicting on the economy.

Separate data showed core consumer prices in Tokyo fell in May, reinforcing expectations inflation will remain well below the central bank’s 2 per cent target for the time being.

The government is likely to decide on Friday an extension to state of emergency curbs to combat the pandemic, according to media reports, clouding the outlook for the fragile recovery.

Japan’s jobless rate rose to 2.8 per cent in April from 2.6 per cent in March, government data showed on Friday, exceeding a median market forecast of 2.7 per cent.

The jobs-to-applicants ratio stood at 1.09, down from the previous month’s 1.10, which was also the Reuters poll forecast.

Core consumer prices in Tokyo, considered a leading indicator of nationwide figures, fell 0.2 per cent in May from a year earlier, separate data showed on Friday, matching a median market estimate.

Japan’s economy shrank in the first quarter and many analysts expect any rebound in the current quarter to be modest as renewed state of emergency curbs hurt consumption.

Weak domestic demand has stoked fears of a return to deflation even as other major economies see inflation tick up, keeping the Bank of Japan under pressure to maintain massive stimulus.