The President ofJapan's central bank, Mr.Shirakawa, warnedonTuesday during a meetingof the Parliamentary Committee, that theJapanese economyis suffering froma sharp decline due to the devastating earthquakethathitJapan on March 11. He pointed out that the bank will expand its efforts tocombat deflation, and that any rise in pricesmustbebasedonstrong economic growth.

Shirakawaalso notedduringhis speechthatdeflationis aserious problem, but the most dangerousis theprogressive declinein theeconomic growth. The Japanese Finance MinisterMr. Noda agreed with what Shirakawa said, as it became clear that that thefinancial policyof theJapanese economywill concentrate on two major issues: supportingeconomic growthandfightdeflation