Japanese Prime Minister Junichiro Koizumi denies speculation that he will call a general election this year. Instead, he vows to press on with reform plans to revitalize Japan's troubled economy.

Japanese Prime Minister Junichiro Koizumi pledges to move forward with efforts to improve the economy by cleaning up bad bank loans, which have all but paralyzed the banking sector.

In his first news conference of the year, Mr. Koizumi said that by speeding up the disposal of bad loans, unemployment may rise. But he notes he has created measures to protect workers and will take further steps to stimulate the economy, including setting aside more funds for public spending.

He also said the government will work closely with the central bank to ease deflation. While Japan is the world's second largest economy, it has been in and out of recession for more than a decade.

Underscoring his desire to focus on the economy, Mr. Koizumi squelched rumors that he would dissolve parliament and hold a general election this year to stave off strong opposition within his party, the Liberal Democrats.

Mr. Koizumi came to office 20 months ago, vowing to reform the economy and political system. His promises have angered the party's old guard and some business interests. His public approval ratings were above 80 percent during his first months as prime minister, but they have slumped to 50 percent or less.

Mr. Koizumi also discussed the North Korean nuclear dispute in his nationally televised news conference. He said Japan will closely cooperate with the United States, South Korea, China and Russia to try convincing Pyongyang to abandon its nuclear ambitions.

Last month, the North began restarting an idle nuclear reactor facility, which could produce weapons-grade plutonium. It also expelled two United Nations nuclear inspectors.

Mr. Koizumi said relations between Japan and North Korea will be normalized after the agreements in the two countries' bilateral declaration are implemented.

The document was signed at a summit between Mr. Koizumi and North Korean leader Kim Jong Il in September. It calls on the North to obey international agreements it has signed, move toward a comprehensive solution on nuclear weapons development and renew a moratorium on missile tests.