RTTNews - Wednesday, the Bank of Japan's board member Seiji Nakamura said it may be too early to end corporate funding programme at this time.

Speaking to reporters in Niigata after addressing a conference of business leaders, Nakamura said financial markets and funding conditions remain severe in the country.

He told business leaders that it is important to retain extraordinary measures for an appropriate time period at required amount. The BoJ's corporate funding measures are due to expire in September.

The central bank has been purchasing corporate debt and lending to commercial banks in exchange for sufficient collateral since it lowered its overnight lending rate to a level close to zero, at 0.1%.

Moreover, Nakamura said the Japanese economy will take considerable time to get back on a full-fledged recovery path. The world's second biggest economy contracted 14.2% in the first quarter. According to latest set of forecasts from the World Bank, the Japanese economy would contract 6.8% in 2009, while the world economy is set to shrink 2.9%.

Exports, the country's growth engine, has dropped 40.9% annually in May, larger than a 39.1% fall seen in April, data released by the Finance Ministry showed Wednesday.

However, raising its assessment for the second straight month in June, the BoJ said exports are expected to continue recovering, mainly due to progress in inventory adjustments both at home and abroad. The government also sees signs of a pick up in exports.

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