TOKYO (AFX-ASIA) - Tetsuzo Fuyushiba, Secretary-General of the ruling coalition New Komeito, said he fears the US terrorist attack may cause Japan to fall into a deflationary spiral and lead the world economy into recession. The government should respond by boosting spending through a supplementary budget and raising the planned limit on new bond issuance, he told reporters after a meeting of leaders of the three ruling coalition parties. "I think conditions underlying economic policy have drastically changed after the US terrorist attack, which I believe will push Japan into a deflationary spiral and the world economy into synchronised recession," he said. "This evening, when we have a chance to meet with the prime minister, I will convey the idea that it is time for the prime minister to act flexibly and boldly for the economy," he said. "The government should not hold to its 30 trln yen bond limit. We should build up necessary measures such as employment and stockmarket-boosting action, as well as help for smaller companies," Fuyushiba said. "The government should continue, even if total spending for those measures passes the limit," he said. Japan faces an extraordinary economic situation, with the Nikkei 225 stock index below the 10,000 point level and the US markets halted, he said. "The coalition parties reaffirmed the position that they will enact laws for securities-tax incentives and a body to buy banks' cross-shareholdings in the upcoming extraordinary parliamentary session," Fuyushiba said. "We shared a common view that a slower process of enactment of the laws would have a negative impact on the present situation," he said. The ruling parties affirmed that the laws should be implemented from January 1.