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BOJ Shirakawa: To Keep Extremely Accomodative Policy

TOKYO -(Dow Jones)- Bank of Japan Gov. Masaaki Shirakawa reiterated Wednesday the central bank will keep extremely accommodative monetary conditions, as it expects prices to continue on a downtrend.

"As the pace of an economic recovery is expected to be moderate, downward pressure on prices will also likely continue for an extended period of time," Shirakawa said at a meeting hosted by Kyodo News.

But the BOJ chief said the possibility is low that price falls will pressure the economy significantly lower.

Last week, the BOJ policy board released fresh forecasts for prices and growth. It said the consumer price index will likely stay in negative territory for at least for this and the next two fiscal years.

The board also kept its policy target rate at 0.1%. Together with the rate decision, it voted to scrap outright buying of commercial paper and corporate bonds on Dec. 31, as scheduled, and to end a special lending facility to provide three-month funds at 0.1%, at the end of March.

-By Megumi Fujikawa and Tomoyuki Tachikawa, Dow Jones Newswires; 813-6895- 7550; megumi.fujikawa@dowjones.com, tomoyuki.tachikawa@dowjones.com

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  11-03-092301ET
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