Japan to cut econ forecast to 3% contraction -media

TOKYO, April 21 (Reuters) - The Japanese government plans to cut its economic forecast for the current fiscal year started in April to a 3 percent contraction in real gross domestic product, the Nikkei business daily reported on Tuesday.

In January, the government forecast a flat growth for the current fiscal year and a 0.8 percent contraction for the year ended in March.

Finance Minister Kaoru Yosano has said that the government needs to revise its forecast given the rapid deterioration in the economy due to tumbling exports and cutbacks to production.

The International Monetary Fund said last month that the Japanese economy, the world's second-largest, will likely suffer a 5.8 percent contraction in calendar 2009 and will continue to shrink in 2010 by 0.2 percent.

Prompted by growing fears of an economic free-fall, Tokyo announced earlier this month a stimulus package sized at 15.4 trillion yen, with which it hopes to raise the country's economic activity by about 2 percentage points and create 400,000-500,000 jobs. [ID:nT12543] (Reporting by Yuzo Saeki; Editing by Edwina Gibbs)