Bank of Japan sees recession easing

THE RATE of deterioration in the Japanese economy has begun to slow, the country&rsquo;s central bank said yesterday, signalling that the worst of its recession could be over.<br /><br />The Bank of Japan (BoJ) opted to leave interest rates unchanged at 0.1 per cent, but issued a more optimistic outlook based on increased production in the manufacturing sector and rising exports.<br /><br />In a statement, the BoJ said: &ldquo;Japan&rsquo;s economic conditions, after deteriorating significantly, have begun to stop worsening&rdquo;.<br /><br />It added that financial conditions were still difficult, but said the economy was likely to begin &ldquo;levelling out over time&rdquo;.<br /><br />There was no change or extension of the BoJ&rsquo;s programme of buying up corporate bonds in a strategy of quantitative easing, a scheme due to end in September.<br /><br />The bank&rsquo;s optimism was fuelled by a 5.9 per cent rise in factory output during April. But it warned that inflation could fall faster than expected, depending on global and domestic market conditions.