Japan PM says economic situation severe

TOKYO (Reuters) - Japanese Prime Minister Taro Aso said on Wednesday that Japan's economic conditions were severe and that a worsening of conditions in the corporate sector was starting to have an impact on households.

"The most rapid deterioration was seen in private capital spending," Aso told the budget committee in the upper house of parliament, after data showed Japan's economy shrank 4.0 percent in the first quarter, the biggest contraction on record.

"Personal consumption also fell moderately. I believe that a worsening of conditions in the corporate sector is starting to have an impact on households."

(Reporting by Tetsushi Kajimoto)

Article Published: 20/05/2009