News: UPDATE 1-NZ unemployment rate rises in Q4, participation hits record levels

(Adds market reaction, further details)

WELLINGTON, Feb 1 (Reuters) - New Zealand's unemployment rate rose to 5.2 percent as a record percentage of people participated in the workforce in the fourth quarter, according to data released by Statistics New Zealand on Wednesday.

The New Zealand dollar fell to $0.7307 off near-10-weeks highs around $0.7345 in the wake of the release.

Unemployment had hit an eight-year low the previous quarter, falling to 4.8 percent and analysts had been expecting a similar result.

In a positive sign for the economy, the participation rate rose 0.4 percentage points to 70.5 percent.

Wage growth remained very muted at 0.4 percent quarterly growth and annual growth of 1.6 percent, adding weight to the central bank's signals that it would keep rates on hold for the near future, after slashing rates to record lows of 1.75 percent last year to stoke low inflation.

The bank meets to decide rates next week on February 9.