Japan's Suga: Expect economy will recover moderately

Japan's Chief Cabinet Secretary Yoshihide Suga attends a news conference at Prime Minister Shinzo Abe's official residence in Tokyo February 1, 2015. REUTERS/Toru Hanai

TOKYO (Reuters) - Japan’s top government spokesman said on Monday that the economy will recover moderately as the environment for employment and wages improves.

Chief Cabinet Secretary Yoshihide Suga also told a news conference that the government will raise the sales tax to 10 percent as planned unless there is a “Lehman shock” type of situation.

Japan’s economy shrank more than expected in the final quarter of last year as consumer spending and exports slumped, adding to headaches for policymakers already wary of damage the financial market rout could inflict on a fragile recovery.

Reporting by Kaori Kaneko; Editing by Chris Gallagher