Adopting similar stances, Finance Minister Kaoru Yosano warned that Japan's economy is still faced with grave downside risks despite some recent signs of improvement in industrial output and exports.

In a statement, Yosano said that as problems in such areas as the job market are still there, Japan's economy is under pressure for further deterioration.

Also referring to the unstable labor conditions as one of economic downside risks, Chief Cabinet Secretary Takeo Kawamura voiced concerns that Japan needs to brace for the further worsening economic situation.

"The (GDP) data are a reflection of the current harsh economic situation," said the top government spokesman, but an early recovery can still be expected if the government's stimulus steps are steadily and quickly implemented.

Takahide Kiuchi, chief economist at Nomura Securities Co., was more upbeat about Japan's economic outlook.

"It is highly likely that economic growth hit bottom in the January-March period," he was quoted by Kyodo News as saying.

Kiuchi projected that the economy will recover at somewhere in the upper half of plus 3 percent in the April-June quarter.

The upturn may run out of steam around the end of 2009 after positive effects from the stimulus steps and corporate restructuring measures faded away, estimated the economist.

Prime Minister Taro Aso also believed that the positive effects of the government's economic stimulus measures are "starting to emerge."

Admitting the economy is in a severe situation, Aso said that the government needs to "take appropriate actions."

(Xinhua News Agency May 20, 2009)