Japan’s rate of unemployment rose in April as compared to the previous month as more people quit their jobs in search of better openings, raising concern about the country’s faltering economic growth momentum.

The rate of unemployment rose to 4.6 percent in April from 4.5 percent in March, data released by the Statistics Bureau showed Tuesday.

There is an increase in jobs on construction sites as a result of reconstruction work in tsunami-damaged areas. However, aside from the boost from reconstruction spending, which largely reflects the replacement of lost assets, economic fundamentals are relatively weak. Business sentiment is lackluster and firms are downbeat about prospects for an improvement before the second half of the year.

Also job cuts have become the norm in Japan as firms have taken stringent action to trim costs and drastically refocus their business. Last month, Sony announced it would be cutting 10,000 jobs in an effort to concentrate resources on core business. NEC Corp said in January that it would be laying off 10,000 people, while Sumco Corp said in February that they would cut 1,300.

The continuing crisis in Europe, the weakness in the US market and the strengthening of the Japanese yen have hampered the growth of Japan's export-focused companies. With the likelihood of Greece's exit from the euro zone looming large, the debt crisis in Europe has revived, consequently affecting Japan’s market sentiments in a big way. Investors have withdrawn from risky assets leading to a stronger yen.

Last month, the Bank of Japan further eased the monetary policy so that the economy could recover from deflation and grow more strongly. The central bank raised the asset purchase programme to 40 trillion yen ($494 billion) from 30 trillion yen.

Earlier this month, Japan reported that its gross domestic product (GDP) rose 1 percent in the first quarter as compared to the last quarter of the previous year. The eco-car subsidy helped drive consumer spending and public investment increased as earthquake-related reconstruction work got underway. However, the dependence on government support is worrying as a rise of tensions in the euro zone has hurt consumer and business confidence and is likely to weigh on private sector spending as government support weakens.