TOKYO (AFX-ASIA) - State Minister for Economic and Fiscal Policy Heizo Takenaka said markets are signalling through the recent rise in long-term interest rates that the government should improve fiscal restructuring. "I think the rise in long-term rates is a sign from the market that it wants the government to improve its fiscal structure," Takenaka told a regular press conference. He added that today's decline in the local equity market is due to short-term factors, such as unwinding of cross-shareholdings, as well as the decline in the US stockmarket overnight. "I don't think the Japanese economy is worse than just after the September 11 attacks, with the launch of the extra budget of around 4.1 trln yen," he said, referring to the current weak level of the stockmarket. "The majority of people are expecting the economy to recover in the second half of next fiscal year. It is necessary to accelerate structural reform further," he added. Takenaka said he does not believe structural reform will slow after the dismissal of the hugely popular and reformist Makiko Tanaka as foreign minister. "I think this is the most important period for the Koizumi government. It is most important for the government to proceed with necessary restructuring," he said. Takenaka said he wants to attend the Bank of Japan's policy board meeting this week to request that the central bank take a flexible policy stance.