'The government will do its utmost to ease people's worries about the economy and their livelihoods. And Japan will become the first country in the world to emerge from this recession,' Mr Aso said in his New Year's statement, without elaborating.

Worries are growing about a deep downturn in the world's second-largest economy. Export-dependent Japan has been seriously hurt by the global recession set off by the US financial crisis.

Mr Aso took office in September last year. But his popularity has quickly plummeted. Voters are frustrated by the prolonged slump, political scandals and Mr Aso's personal verbal gaffes.

His government has promised an extra spending package, expected to pass later this month. Among Mr Aso's measures are expanded credits for small businesses, lower highway tolls and a cash payout to every household to spur consumer spending. But the public reception for such efforts has been lukewarm.

Mr Aso has been facing calls from the opposition Democratic Party to call nationwide snap elections. He has resisted, insisting that boosting the economy is his priority.

'I will never run away. I will move ahead with the people,' Mr Aso said.

Last month, the government forecast that Japan's economy will manage only flat growth in the next fiscal year starting in April 2009.

Top companies, including Toyota Motor Corp and Sony Corp, are slashing jobs. Tokyo's benchmark Nikkei stock index lost 42 per cent over 2008, its steepest slide ever. -- AP