RTTNews - Thursday, Bank of Japan board member Atsushi Mizuno said the global recovery is fragile and cannot be sustained without support from governments and central banks.

The policymaker said the potential economic growth rate for Japan is likely to be lower than the 1% level estimated by the central bank in April. It is still highly uncertain whether the economy will continue turning up, as weak overseas growth could halt capital investment of companies, he said.

In a speech in Okayama, western Japan, Mizuno said central banks should inform markets about their plans for ending non-traditional monetary policy measures without delay, to avoid any turmoil in financial markets. He noted that it is important to differentiate an exit from unconventional and temporary measures and exit from very low interest rates.

According to Mizuno, the central bank has the option to announce its commitment to retain low interest rates if the economy and prices get worse.

On August 11, the BoJ had decided to retain the uncollateralized overnight call rate at 0.1% and refrained from announcing more unconventional measures.

Japan's real gross domestic product expanded 3.7% on an annualized basis during the three months to June, after shrinking for four straight quarters. The world's second largest economy grew 0.9% sequentially versus a 3.1% fall in the prior quarter.

Further, Mizuno said there is very little monetary policy can do to stimulate demand with interest rate at 0.1%. The reason behind deflation is weak economy and he expects the pace of fall in consumer prices to possibly moderate in future.

Consumer prices excluding fresh food dropped by a record 1.7% in June from the previous year.

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