The nation's jobless rate edged up to 4.6 percent from 4.5 percent in March, the internal affairs ministry said, defying economists' expectations that it would remain flat according to Dow Jones Newswires.

However, positive data showing household spending on the rise gave hope amid a lumbering economic recovery.

The news came as reports said Tuesday Panasonic may halve its 7,000-strong Osaka headquarters as part of a bid to streamline the Japanese electronics giant and turn a profit following a record $9.7 billion annual loss.

"Japan's job market is expected to stay at the current level for now but may make progress in line with an expected gradual recovery of the Japanese economy," said Hideki Matsumura, senior economist at Japan Research Institute.

"Japan's job situation is divided over business sectors. The electronics sector is, for example, on the negative side as they are still struggling to find a cue to pick up," he added.

Japan's electronics sector has been hit by the appreciation of the yen, which makes exporters' products less competitive overseas, while falling prices in the face of tough competition and slow demand at home have also eaten into profits.

The government also said Tuesday that household spending rose an inflation-adjusted 2.6 percent from a year earlier in April, higher than an average 2.2 percent growth forecast by economists.

Average spending per household came to 301,948 yen ($3,790) in the month.

"The household spending figures are not so bad," Matusmura said.

The labour ministry said in a separate report Tuesday that the ratio of jobs available to job seekers stood at 0.79 in April, up from 0.76 in March, meaning there were 79 posts on offer for every 100 job hunters.

Last week, the Bank of Japan said it would keep interest rates at an ultra-low zero to 0.1 percent with the nation's moribund economy "expected to return to a moderate recovery path as the pace of recovery in overseas economies picks up."

It also said reconstruction-related spending would help power the world's third-largest economy following the March 2011 quake-tsunami disaster.

However the central bank warned that "there remains a high degree of uncertainty about the global economy, including the prospects for the European debt problem" and the speed of a US economic recovery.

Japan's national debt also remains a key concern, with Fitch cutting the country's sovereign credit rating this month, and warning of another possible downgrade if Tokyo does not hasten a bid to shrink its staggering liabilities.

Tokyo's debt stands at more than twice its gross domestic product -- the highest ratio among industrialised nations.

The European Chamber of Commerce said that while China was an increasingly important market for its members, many were deterred by rising prices and regulatory barriers in the world's second largest economy.

In all, 22 percent of respondents in its annual business confidence survey were considering shifting investment from China to other markets, it said.

"We are happy to report that European companies are continuing to invest and create jobs in China, but the lack of reform of the regulatory environment is worrying and has a disproportionate impact on foreign business as well as on the domestic private sector," said the chamber's president, Davide Cucino.

"There are indications from this survey that as reform continues to stall and costs rise, a previously reliable stream of FDI (foreign direct investment) may slow and planned investments may be shifted to other emerging markets."

The average annual salary of workers in private businesses in the Chinese cities rose 12.3 percent last year from the year before to 24,556 yuan (3,900 US dollars), the National Bureau of Statistics said separately Tuesday.

While Chinese salaries remain low compared with rich countries in Europe and North America, they have been outpacing wage increases in neighbouring countries.

This causes China to lose competitiveness with other growth economies such as Vietnam, and many economists have forecast a trend for companies to set up shop elsewhere.

In April, Finnish mobile phone maker Nokia, which operates several factories in China, broke ground for its first Vietnamese plant, expected to be completed by 2013.

While rising costs are somewhat inevitable as a result of shifts in labour supply and demand, enterprises are also increasingly frustrated about the regulations they have to obey, and sometimes feel unfairly targeted.

Officially, foreign and Chinese companies have to obey roughly the same rules, but it is a widespread sentiment among non-Chinese companies that they face much tougher implementation.

For example, more than 50 percent of the companies surveyed by the chamber said they thought Chinese authorities enforced environmental rules in a more stringent manner when dealing with foreign companies than local ones.

The feeling of unfair treatment extends into other areas too, and EU Trade Commissioner Karel De Gucht complained in February that out of China's $1.1-trillion public procurements market, "only a small fraction is open to foreign business".

While 78 percent of the 557 European companies surveyed planned to expand their China operations, only 36 percent said they expected them to become more profitable.

More than 60 percent listed China's slowing economy, rising labour costs and the slowing global economy as their major concerns.

Overall 59 percent of the companies said they were pessimistic about the cost of labour in the near term, a percentage that grew to 75 in the Pearl River Delta, the factory floor of China's export-driven economy, located in south China near Hong Kong.