Bank of Japan Gov. Masaaki Shirakawa said Monday the economy will keep expanding, playing down concern it may fall into a recession.
"Economic growth will probably keep decelerating for the time being but return to a moderate expansionary path thereafter," Shirakawa said in a speech at the central bank's quarterly branch managers meeting in Tokyo.
Higher oil and raw material costs are slowing global growth and crimping corporate profits, and some economists say Japan is headed for its first recession since 2001. The BOJ may say next week that the economy is slowing more than it had forecast in April, after confidence among large manufacturers fell to a four-year low.