RTTNews - Tuesday, Bank of Japan Governor Masaaki Shirakawa said he do not see a risk of a deflationary spiral now. But, this warrants close and careful monitoring of trends.

He told a press conference that he is not expecting an impressive recovery in Japan. He added that it is uncertain how final demand will respond to policy measures and inventory adjustments and the recovery might not be so drastic.

Earlier in the day, the central bank retained its key interest rate at 0.1% and also maintained its cautious assessment about the economy. The Cabinet Office also left is economic assessment unchanged in August after upgrading it for three straight months. The government said the economy is showing signs of picking up recently.

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