New Finance Minister Fukushiro Nukaga said Friday that he and U.S. Treasury Secretary Henry Paulson, shepherds of the world's two largest economies, have agreed to stay in close touch on developments in the global economy and the financial woes linked to the U.S. subprime mortgage crisis.

Nukaga said they talked for about 20 minutes on the phone, with half the time devoted to the global economy.

"I said Japan's economy is continuing sustainable growth, and we will closely watch and examine stock and currency markets and economic data," Nukaga said at a regular news conference in Tokyo.

"The Treasury secretary said that financial market adjustments may take some time, but the (basis) of the global economy stands firm, and the problem will be definitely overcome," he said.

Nukaga also said Japan's economy is growing steadily, pointing out improved prospects for job seekers.

Touching on next year's national budget, Nukaga emphasized that the government will stick to its plan to limit spending and to accelerate economic growth. The country's huge debts, which currently stand at about 150 percent of the gross domestic product, are the highest level among major economies.

"We need to consider how Japan should sustain economic growth, while consolidating finances. We also need to consider how we should deal with revitalizing local economies following the result of the Upper House election," he said.

The widening economic gaps between large urban areas and rural regions was part of the reason the ruling Liberal Democratic Party, which traditionally relied on the farm vote, suffered a huge defeat in the July Upper House election.

However, the Finance Ministry reported Thursday that total spending may rise 3 percent to ¥85.7 trillion in the fiscal year starting next April, due to huge debt-servicing costs, swellings social welfare costs and increases in subsidies to local governments.