COME Shirakawa, said world growth slows but intact recovery

By Leika Kihara

TOKYO. Sun, July 3, 2011 9 pm EDT

TOKYO (Reuters) - the Japan Bank Governor Masaaki Shirakawa said that slightly more cautious on global growth as signs of slowdown in the global economy continues to recover albeit at a slower pace, a point of view to spread to emerging economies.

But he upheld the assessment of the Central Bank, while the Japanese economy remains under pressure downward, mainly on the production, he shows signs of pick up.

"The Japanese economy resumed probably a moderate recovery as more ease constraints supply and output activity picks up," Shirakawa said in a speech at a quarterly meeting of managers of the branch of the Bank of the Japan Monday.

The Bank of Japan is growing more and more convinced that will go the Japanese economy back after the devastation of the 11 March earthquake and the tsunami at the end of this year that the restoration of the supply chain companies more quickly than expected.

Dans in factory output jumped by most dans almost 60 years, while the latest Central Bank's quarterly tankan survey showed that companies expect an improvement in the sense of business in the coming months and plan to increase capital expenditures.

The Bank of the Japan should maintain distance on political relaxation more in his review of rates, the next week and tone up its optimism on the output and the economy, even if it strikes a note of caution about signs of an economic slowdown.

Some members of the Bank of the Japan became more more worry softening of world growth which, if prolonged, will hurt exports just at the moment where Japan undermines the constraints of supply in the fall.

Acknowledgement of Shirakawa of the slowdown follows a warning by the BOJ Yoshihisa Morimoto Commission Member last month that the global economic risks have heightened somewhat after a sweep of weak US data.

But many of the Central Bank did not expect even the global slowdown turn into a recession which would adversely affect export quite seriously threaten the recovery of the Japan.

"Output and private domestic demand showed signs of picking up, as supply constraints begin to ease and household and business sentiment improved somewhat" Shirakawa said in the speech Monday.

The Bank of the Japan should cut its economic forecasts for the current fiscal year which began in April when it conducts a quarterly review of its long-term projections in the rate review next week, sources familiar with the thinking of the Bank said.

But this would be a technical revision reflecting the sharp contraction in the January-March GDP and revisions in the figures of last year and would not affect monetary policy and the opinion of the Bank of Japan that growth will resume towards the end of this year, they said.

(Editing by Edmund Klamann)