Japan’s economy is unlikely to respond to a planned fiscal stimulus but will have to endure higher unemployment and possibly a return to deflation and shrinking output, according to Kaoru Yosano, economy minister.

In an interview with the Financial Times, Mr Yosano said there could be no quick fixes through fiscal spending. He painted a gloomy economic picture, saying that companies were preparing to cut thousands of non-permanent jobs at the end of the year when fixed-term contracts expired.