Tokyo (Agencies): China eclipsed Japan’s 42-year ranking as the world's second-biggest economy in 2010, with data out on Monday.

"It is difficult for the deflation-plagued Japanese economy to achieve self-sustained growth," explained Naoki Murakami, chief economist at Monex Securities.

Japan's post-war economic miracle placed it at number two behind the United States for above forty years, but blockage after the Japanese property bubble burst in the 1990s helped put booming China on course to supplant its neighbour.

However, Japan remains around 10 times richer on a per-capita basis, reported the International Monetary Fund.

Predictions differ as to when China may overtake the US as number one economy, but it should occur by 2025, according to estimates by the World Bank, Goldman Sachs and others.

In spite of Japan crawling out of a severe year-long recession in 2009, its revival remains brittle with deflation, high public debt, weak domestic demand and a strong yen all concerns for policymakers.

Pressure is on Prime Minister Naoto Kan, who has seen his approval ratings fall as his government looks to boost the economy without deepening the liability amid a legislative impasse over his $1.1 trillion budget for the next fiscal year.

Use of about a third of government expenditure in social security system, tax system overhaul, private consumption, expiry of subsidies for green car purchases and decline in cigarette sales, Japan's real gross domestic product and exports were the factors affecting the economy of Japan.

But many analysts expect the economy to bounce back in the January-March quarter as the rising tide of global recovery lifts Japan, amid a recent pick-up in corporate spending and exports.