TOKYO, July 6: Despite a raft of encouraging economic indicators. Japanese government leaders today cautioned against over-optimism about recovery from the worst recession since World War II. says AFP.

"Although the worst is over, I don’t expect to see an economic recovery by leaps and bounds," Finance Minister Klichi Miyazawa said, the day after the Bank of Japan reported a sharp improvement in business sentiment.

Miyazawa said private consumption and corporate capital spending on plants and equipment, key engines for economic growth, remained weak.

A planned 520 billion yen "14.3 billion dojlgr) supplementary budget was'"kimed art 'pre-

venting the economy from going backward rather than promoting its recovery," he said after a regular cabinet meeting.

The extra budget, designed to finance the government’s latest economic measures to create more than 700,000 jobs and boost industrial competitiveness, was due to be submitted to parliament on Friday.

Kaoru Yosano, the minister of international trade and industry. told a separate news conference that there was no pickup in corporate spending.

'There is the need for us to deal with the economic situation with the same severe attitude as before," he said.

The central bank's quarterly Tankan" survey at business, confidence, released the previous day, shpwed a rise in the

Closely watched index for large manufacturers to minus 37 in. the three months to June from minus 47.

The index had also picked up in the three months to March for the first time in 18 months.

The improvement had been anticipated following encouraging economic figures in the past month — a surprising 1.9 per cent quarter-on-quarter economic growth in January-March and'the first decline in the monthly unemployment rate for 10 months in May.

But the upturn in gross domestic product (GDP), which has. boosted Japanese share prices, has been largely attributed to the short-term mea-.sure .of..frontloading public works to the, first quarter of the year. , ,-si a