Thursday, Bank of Japan Governor Masaaki Shirakawa said the central bank will make every effort to bring the economy back on to a recovery path. He hinted that increasing long-term government bond buying is not necessary for the time being.

Expressing confidence, Shirakawa said the economy may pick up at a moderate pace in the latter half of fiscal 2009.

Also on Thursday, the BoJ retained its key interest rate at 0.1% and lowered its growth outlook. The bank now expects the economy to shrink 3.1% this fiscal and to grow 1.2% in the fiscal 2010. According to the forecasts made in January, decline in fiscal 2009 was seen at 2% and growth for 2010 at 1.5%.

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