BOJ's Shirakawa says will do utmost to beat deflation

TOKYO Feb 7 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said on Tuesday the central bank would continue to do its utmost to achieve sustained economic growth with price stability, signalling its readiness to maintain an ultra-easy monetary policy until an end to deflation is in sight.

"We recognise that Japan's economy is in a severe state," Shirakawa told a parliamentary committee meeting.

Shirakawa, however, countered criticism from lawmakers that the BOJ was not easing monetary policy enough, saying the central bank is already flooding markets with ample liquidity.

He also said the government and the private-sector should work together to overcome prolonged deflation that is plaguing Japan.