Japan’s economy is no longer in freefall and will rebound as global demand picks up, according to a member of the government committee that charts the economic cycle. “The worst is over,” Takao Komine, 62, an economist and professor at Hosei University in Tokyo, said in an interview yesterday. “We’ll probably see the beginning of recovery at the end of this year.” Investors and analysts are becoming more confident that the nation is starting to emerge from its deepest recession since 1945 after reports showed industrial production rose for the first time in six months and a slump in exports eased in March. The economy may grow an annualized 1.2 percent pace this quarter, according to the median estimate of 10 economists surveyed by Bloomberg News, the first expansion in a year. The Nikkei 225 Stock Average gained 0.6 percent to 9,443.15 at 2:26 p.m. in Tokyo, heading for its highest close in six months. It has risen 34 percent since reaching a 26-year low on March 10. The sharpest contractions in gross domestic product in more than 30 years confirm the world’s second-largest economy “completely fell apart” at the end of 2008, said Komine, who is one of 11 economists responsible for marking Japan’s recession and recovery cycles. He said any economic revival will depend on demand from abroad. ‘Impossible’ “It’s impossible for Japan’s economy to revitalize itself as long as overseas economies remain weak,” Komine said. Exports dropped more than 40 percent in the first three months of this year. The International Monetary Fund said last month that the world economy will shrink 1.3 percent this year before expanding 1.9 percent in 2010. Japan’s GDP probably shrank an unprecedented 16.2 percent last quarter after contracting 12.1 percent in the last three months of 2008, according to the median forecast of nine economists surveyed by Bloomberg News. Households won’t benefit from a recovery until companies start raising wages and hiring workers, Komine said. Japan’s unemployment rate rose at the fastest pace since 1967 in March and wages slid the most in five years, indicating consumer spending, which accounts for more than half of the economy, is unlikely to buoy a rebound. “As the economy dropped to an unprecedented level, the government, companies and especially households won’t feel the recovery, at least for a while,” said Komine, who estimates unemployment could climb to a record 5.5 percent. Six Decades Pioneer Corp., a car audio and navigation systems maker, will eliminate 9,800 jobs and Teijin Ltd., a carbon fiber producer, will cut 2,500 jobs over three years, the companies said last week. Toyota Motor Corp., expecting a loss for the first time in almost six decades, has cut temporary workers and plans to reduce costs, including salaries, by 10 percent. Prime Minister Taro Aso’s 15.4 trillion yen ($155 billion) stimulus package announced last month is unlikely to help the economy as much as the government estimates, Komine said. The government last week said the economy will shrink a record 3.3 percent in the year ending March 2010 and the stimulus will prevent it from contracting a further 1.9 percentage points. “Given the economy is starting from a very low level this year, the government estimate is very optimistic,” Komine said. “Growth will probably be about minus 4 percent.”

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