TOKYO - JAPAN'S economy has hit the bottom of its deepest recession since World War II but it is 'still sluggish,' the country's new economic and fiscal policy minister said on Thursday.

'Although the economy has hit bottom (during the January-March period), it is still sluggish and levels are lower than those before the financial crisis,' Yoshimasa Hayashi said at his first press conference after taking the position.

He was named to the post on Wednesday as embattled Prime Minister Taro Aso freshened up his cabinet ahead of elections that he must call by September.

He took over the role from Kaoru Yosano, who keeps his two other posts as finance minister and financial services chief.

Asia's biggest economy shrank at an annualised pace of 14.2 per cent in the first quarter of 2009, the fastest pace on record.

Analysts say that Japan, the world's second largest economy, appears to have come through the worst of its slump, but any recovery is likely to be long and slow given the country's heavy dependence on exports to drive growth. -- AFP