Japan's Minister for Finance Naoto Kan has admitted that the country will have to battle deflation and unemployment before a full recovery becomes clear. "The economic situation is still severe, falling short of a self-sustained recovery, even though it is beginning to pick up," he reported, as the new government began its first term. "Looking ahead, there are the risks of a further worsening of the employment situation and deflation, and the foundation of a strong, private demand-led recovery is still fragile." Japan announced a fourth stimulus package last month, worth 7.2 trillion yen (AU$86 billion), which was designed to "tackle deflation and make sure the economy will recover,"said Kan. The total package is valued at almost AU$300 billion. The spending will be financed by government bonds rather than tax revenue, with AU$111 billion worth of bonds to be issued.