Japan's economic recovery remains intact despite recent tumult on global markets, but urgent efforts are needed to tackle the nation's swelling public debt, the new finance minister said Friday.

"The Japanese economy will be able to keep on its economic recovery path, supported by private sector demand," said Fukushiro Nukaga, a former defence agency chief who was given the finance post in a cabinet reshuffle last month.

Firms are spending more on new plant and equipment and household consumption has been picking up, supported by rising employment, he said.

"We see that the world economy's fundamentals are still favourable although we need to remain

vigilent over the risk factors as well," he told reporters.

He said that with the population rapidly ageing, it was vital for Japan to tackle its huge national debt, which is the highest among industrialised nations after the government spent trillions of yen on emergency spending packages to try to haul the economy out of its deflation doldrums in the 1990s.

"Japan has quite a massive amount of debt outstanding. We really need to embark upon the fiscal consolidation efforts right away," he said.

But he declined to comment on a potential timetable for a sale tax hike that many economists say is inevitable but which is unlikely to prove a vote winner for the embattled government.