Stimulus helped end recession: Japan PM

Aso -- who has for months trailed his opposition rival Yukio Hatoyama in polls ahead of the August 30 vote -- also vowed to strengthen the economic rebound to ensure the Japanese people felt its benefits.

“Since I became prime minister, I have done my best on economic measures,” Aso told a televised debate with five other party leaders. “As a result, we have seen some signs of a brighter future for the economy.”

Hatoyama, head of the center-left Democratic Party of Japan (DPJ), fired back: “Mr. Aso said Japan is seeing signs of economic recovery, but it is not what the people are actually feeling at all.”

Earlier in the day, government data showed the world's second-biggest economy grew 0.9 percent in the April-June quarter, meaning Japan had officially emerged from recession, following Germany and France last week.

At an annualized pace, the quarterly growth reached 3.7 percent.

Aso's government has launched a series of pump-priming packages to stimulate the economy and cushion the blow of unemployment, which hit 5.4 percent in June, close to its post-World War II high of 5.5 percent.

Aso conceded that, despite the good growth data, “our people are yet to really feel an economic recovery.

“Economic recovery is my top priority,” he added. “I will make the Japanese economy recover at any price.”

The opposition DPJ has enjoyed a strong lead in polls over Aso's conservative Liberal Democratic Party (LDP), which has maintained nearly unbroken rule for more than half a century.

Japan plunged into recession in the second quarter of 2008 as the global downturn crushed demand for its cars, electronics and other exports.

While Japan's recession is technically over, analysts warn that major risks remain, notably from rising unemployment and renewed deflation.

In their election platforms, both parties have vowed to boost the economy, but while Aso's LDP has focused on growing industries to create wealth, the DPJ has promised more spending on families to boost domestic demand.

Hatoyama said his party would “speed up measures to directly stimulate household spending such as child-care allowances, income guarantees for farmers and toll-free highways travel.

“It's preferable for us to expand domestic demand by boosting consumer purchasing power, which will eventually result in economic expansion,” he said.

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