Finance Minister Masajuro Shiokawa on Tuesday said Japan’s economy has hit bottom, citing improvements in exports, the price trend and the job situation.

“I think the economy has hit bottom when assessing various (statistics) comprehensively,” Shiokawa told a regular news conference.

Shiokawa acknowledged, however, that the pace of economic structural reforms is slow, as indicated by foreign credit-rating agencies.

He said exports have been relatively brisk, falls in consumer prices have been halting, and the deterioration in the job situation is coming to an end.

The government is expected to upgrade its economic assessment for May in a monthly report to be released Friday.

It will be the third consecutive month for the government to upgrade its assessment.

Shiokawa said he is not opposed to compiling packages of economy-boosting measures, but that he is against using fiscal outlays.

As for the downgrading of Japanese government bonds by credit-rating agencies, Shiokawa said: “I do not think (the ratings) are correct. But we need to take them seriously as the rating agencies are trusted internationally.”

The Finance Ministry sent a letter to three foreign credit-rating agencies last month, claiming their downgrading of Japanese government bonds do not reflect Japan’s economic fundamentals.

One of the three, Fitch Ratings, has so far responded in a letter to the ministry that Japanese government bonds have been given a negative outlook because of the slow progress of structural reforms. Another, Moody’s Investors Service Inc., is expected to answer shortly with a further downgrade, perhaps by two notches.

Tempering optimism

Trade minister Takeo Hiranuma on Tuesday said he will candidly report on the state of the Japanese economy to an upcoming meeting of the Organization for Economic Cooperation and Development.

Despite some recent favorable signs, however, the economy, trade and industry minister cautioned against too much optimism.

“We should not relax our attention, even though signs of bottoming out are seen in some parts,” Hiranuma told a news conference.

Hiranuma was to leave for Paris on Tuesday to attend the two-day ministerial meeting of the 30-member OECD, which begins Wednesday. He is slated to deliver an address on the Japanese economy and said he plans to present it “as it is.”

Hiranuma pointed to lingering lethargy in machinery orders, a key leading indicator of corporate capital investment, as a reason for his cautious view.

“I will frankly tell the OECD the decline in the trade surplus is halting and corporate productivity and profits are beginning to increase, but machinery orders remain stalled,” he said.

Japan’s core private-sector machinery orders fell 6.2 percent in March from February, after rising in February for the first time in three months, the Cabinet Office said Monday.

Economic and fiscal policy minister Heizo Takenaka on Monday hinted the government will upgrade its economic assessment for the third straight month in a report due out Friday. Takenaka will also take part in the Paris meeting.

The OECD is likely to acknowledge the possibility of a modest recovery in Japan’s economy at the annual gathering, according to a draft statement obtained Saturday.

“The recovery that began late last year in the United States is spreading to most of the OECD area, with Japan also likely to experience a very modest recovery beginning later this year,” the draft says.

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