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.

"Job offers may have dipped again in May due to the third round of emergency declarations. That may further hold back the recovery in employment," said Tom Learmouth, an economist at Capital Economics. "But further ahead we still expect both employment and the labour force to return to pre-virus levels in the second half of the year as vaccines allow the economy to return to full health."

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.

The expected extension of state of emergency curbs to combat Covid-19 heightens the chance the BOJ will push back the current September deadline for a package of measures to cushion the economic blow from the health crisis.