InsideJapan News Network

The central bank of Japan has revised its economic growth forecasts and maintained interest rates close to zero.

According to the bank's October report, the country's economy is set to grow by 2.1 per cent in the year to March 2011 and by 1.8 per cent in the following 12 months. This is lower than in the Bank of Japan's July report forecast growth of 2.6 per cent and 1.9 per cent.

Masaaki Shirakawa, governor of the bank, explained the weaker US economy was a major cause for the revised figures, reports Kyodo.

He added: "Outlook for the US economy has turned pessimistic from optimistic."

Other factors for the downgrade include the continued strength of the yen and the end of the government's invention measures.

Mr Shirakawa has confirmed he will discuss Japan's monetary controls with G20 representatives at a two-day meeting.

Written by Kimberley Homer.