TOKYO (AP) -- The head of the Bank of Japan said Monday that "Japan's economy remains in an extremely severe state."
In testimony before Parliament, central bank governor Masaru Hayami noted that corporate earnings have slipped and industrial production has fallen.His assessment follows a report last week that Japan's economy shrank at an annual rate of 2.6 percent in the latest quarter, marking a full year of decline.
The slump in Asia's biggest economy has prolonged and deepened the economic crisis plaguing neighboring countries from Indonesia to South Korea.
The government has approved limited tax cuts and massive spending on public works projects to boost economic growth, but so far the efforts have failed to pull Japan out of its worst recession since World War II.