But Hiro Shirakawa, Credit Suisse's chief economist for Japan, played down fears, saying that the slowdown might be cyclical rather than a more permanent, structural one.
Japanese manufacturing activity contracted in March at the same pace as in February and output shrank the most in almost three years, a private business survey showed last week.
"Our biggest headache ... is a sharp decrease in exports to China, but namely relating to high tech or IT industry related demand weakness, " Shirakawa told CNBC at the Credit Suisse Asian Investment Conference in Hong Kong.
He added that even though "U.S.-China trade dispute could come to an end (with) possibly some agreement, but still our biggest focus is whether or not the global demand for mobile phones, PCs is really picking up."
But, despite that weakness in demand, there are signs that stocks of electronics parts are still being snapped up, suggesting that the manufacturing slowdown is merely a cyclical adjustment, he said.
The overall economy also doesn't appear overly gloomy, with domestic consumption and the services sector "still doing quite steady," said Shirakawa.
All signs therefore point to the country not yet facing a recession, he concluded.
— Reuters contributed to this report.