Whoever succeeds Shinzo Abe as Japan’s prime minister will be confronted with growing signs that the job market is deteriorating in an economy laid low by the coronavirus pandemic. Top government spokesman Yoshihide Suga is emerging as a front-runner to become next premier, heightening the chance the government will continue down the policy course set by Abe – notably the “Abenomics” strategy aimed at reviving the economy. But the widening damage from COVID-19 is threatening job creation, among the few successes of Abenomics. Japan’s unemployment rate crept up to 2.9% in July and job availability fell to a more than six-year low, data showed on Tuesday. Nearly 2 million people lost their jobs in July, about 410,000 more than in the same month last year, with the number of job losses rising for six straight months through July. Among the hardest hit have been non-permanent workers, who make up nearly 40% of Japan’s workforce and are concentrated in industries like hotels, restaurants and entertainment. The number of temporary workers fell by 1.31 million in July from a year ago, the biggest drop in more than 6-1/2 years. “We’re seeing more non-permanent workers lose their jobs, especially in industries vulnerable to the pandemic,” said Shinya Kodera, an economist at Mizuho Research Institute. Government subsidies and Japan’s unique labour practice, prioritising job security over wage hikes, have kept the jobless rate low compared with around 10% in the United States. But the pandemic is even starting to affect hiring of university graduates, who until recently had no trouble landing jobs due to chronic labour shortages in an ageing population. As of Aug. 1, the ratio of students with job offers stood at 83.7%, 4.5 percentage points below the 2019 level, according to employment information provider Disco.