Japan's jobless rate stands at a post-war high of 5.5 percent for December, rising from 5.3 percent in November.
Labor Minister Chikara Sakaguchi said the jobless condition reflects the current fragile economy. He said there is a need to create measures to deal with it.
The situation is expected to get worse as the government pushes its reform agenda to clean up the banking industry and create a more competitive business sector.
In order to bring more jobs on line, the Japanese parliament approved a $25 billion spending package. Half the funds will go for public works projects and the rest for so-called "safety-net measures" to help small business owners who hire the jobless.
Some economists have criticized the package, saying that spending alone cannot solve Japan's problems - which include deflation and a weak stock market.
Still, some Japanese companies are managing to thrive. Sony posted a record profit in the third quarter of the year to more than $1 billion. That is nearly double from the same period last year.
The electronics and entertainment giant partly attributes its healthy performance to a string of box office hits, including the movie, Spider-Man. Strong sales in its video game businesses also helped. However, Sony officials warn weak consumer spending in the United States could weigh on full year earnings.