Japan economy to improve later this year - Nukaga

TOKYO Jan 16 (Reuters) - Finance Minister Fukushiro Nukaga said on Wednesday the Japanese economy would likely improve later this year, adding that he would continue to monitor financial markets.

"The world's economy remain firm overall. In Japan, we have problems in housing but in the latter half of this year it will recover," Nukaga told reporters.

"I think the Japanese economy will improve later ... There are also views that the U.S. economy will recover later this year," he said when asked about a fall in Japanese share prices and the rise in the yen against the dollar.

Tokyo's Nikkei average .N225 plunged to 26-month low while the yen JPY= soared to a 2-1/2-year high against the dollar on Wednesday.

(Reporting by Hideyuki Sano)