"This is the worst ever crisis in the post-war era," he told a news conference on Monday. "There is no doubt about it."

"Japan alone won't be able to recover. The economy has no border," he said. "It is our responsibility to rebuild the domestic economy for other countries."

Japan has been badly hit by the falling global demand for its products and an unprecedented slump in exports, putting further pressure on the prime minister, Taro Aso, to pump more money into the ailing economy.

No extra stimulus

Yosano said Japan faces its worst economic crisis since World War II [AFP]
But Yosano said the government had no immediate plans for additional stimulus measures until parliament passes a budget for the fiscal year starting on April 1.

"The [Liberal Democratic] Party may have a plan for additional spending worth 30 trillion yen ($327.5bn)... but we can't think of good ways to spend that much" to bolster the economy, he added.

During the last major economic crisis in the first quarter of 1974, Japan's economy shrank 3.4 per cent, or annualised 13.1 per cent.

Takeshi Minami, chief economist at Norinchukin Research Institute, said the latest data "highlighted the weakness in exports".
 
"The January-March quarter is likely to show another minus figure [annualised] in double digits or something close to double digits," he told Reuters.

As Japan's central bank prepares to meet again this week, analysts say they are expecting another massive contraction in the first quarter of 2009.

"As the US stimulus package will have its effect on Japanese exports, Japan's economy may start picking up from April-June onwards, but it will be a very weak recovery amid a lingering recession," Tatsushi Shikano, senior economist at Mitsubishi UFJ Securities, told Reuters.

"The economy can't avoid a second straight year of contraction in the fiscal year starting in April."