In Japan, a Reuters poll showed manufacturers have grown much less pessimistic about business over the last month, but consumer reluctance to spend has reinforced concerns that the recovery from a deep recession will be long and slow.

The survey may point to a sharp rebound in the quarterly Bank of Japan Tankan survey, due out on July 1, from a record low in the first quarter, when businesses were reeling due to sliding global demand and a severe squeeze in corporate funding.

But while service-sector sentiment bounced off the record low hit in the Reuters survey in May, retailers complained that consumers were still not loosening their purse strings due to worsening job conditions.

"Japan's economy is very spotty and the speed of the recovery is different when you compare different parts of the economy," said Takahide Kiuchi, chief economist at Nomura Securities.

"The economy could run out of steam starting from the summer and it will be very easy to fall into a double dip. Exports of materials to China are doing well now, but final demand isn't increasing globally."

Regulatory Reform

Export-driven China and Japan have both been hit by collapsing demand from the United States and Europe in the wake of a banking crisis that erupted when a long credit boom fuelled increasingly risky lending, notably in US mortgages.

In an effort to avoid a repeat, US President Barack Obama laid out tough regulatory reforms, vowing to halt "a cascade of mistakes ... over decades" that had eroded bank and market oversight and triggered the financial crisis.

"My administration is proposing a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression," Obama said in a speech at the White House.

The British Chambers of Commerce (BCC) said on Thursday the worst of the recession was probably over and output would likely turn positive in the fourth quarter of this year.

But it said recovery was not guaranteed and there was a risk the economy could worsen again if record low interest rates and expansionary fiscal policy were withdrawn too early.

"A temporary rebound driven primarily by the stock cycle will not produce a sustainable recovery unless consumer spending, investment and exports start to improve," said BCC Chief Economist David Kern.