By Jason Theodorou

Japanese Prime Minister Naoto Kan has said that believes that the country's economy could need extra stimulus spending. Mr. Kan said that despite growth in the economy, the level of unemployment was a cause for concern in addition to the economic status of other countries.

Mr. Kan has said that the government may finance new stimulus measure with budget reserves until next March. The Japanese economy expanded at a rate of 5% between January and March, but the rate of growth has decreased according to leading economists.

The Japanese government passed a $81 billion (£51 billion) stimulus package in December 2009. Government incentives for consumer spending have not seen sustained results.

The government is also struggling to boost exports, with the yen at a 15-year high against the dollar, making China and Korea more attractive competitors.

Mr. Kan said: '"Generally speaking, the economy is picking up steadily but the jobless rate is at a high level and optimism is not warranted about the situations in other countries".

"We will closely watch how the economy is performing to decide whether we need to take some kind of response".

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