Japan's government and the central bank will take all necessary steps to ensure a sustained economic recovery as the country has not completely emerged from deflation yet, Economy Minister Yasutoshi Nishimura said on Thursday.

"We haven't reached a situation where we can say Japan has completely emerged from deflation," Nishimura told parliament.

"But the economy is making progress towards exiting from deflation. The government and the Bank of Japan will work closely together and take all necessary policy steps" to keep the economy on a recovery track, he said.