The Bank of Japan negatively revised its economic outlook Wednesday, saying the economy was slowing.

The central bank thus dropped its view published last month that a moderate expansion remained in place.

Japan's economic growth is slowing mainly due to the effects of high energy and materials prices, the central bank said in its April economic report.

The central bank cautioned corporate profits were leveling off and sentiment among businesses had grown more cautious.

It added housing investment had started to recover, but that the pace of spending in the sector was growing only slowly. In terms of the outlook, the BoJ said: Japan's economy is expected to grow at a slower pace for the time being and follow a moderate growth path thereafter.