BOJ's Shirakawa: Japan sluggish; sees funding risks

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FUKUOKA, Japan, Dec 1 (Reuters) - Bank of Japan Governor Masaaki Shirakawa said on Monday that sluggishness in Japan's economy was increasing rapidly, as could be seen from weak industrial output data out last week.

Amid reports the central bank may soon hold an emergency meeting to consider moves to ease money market conditions, Shirakawa also said the availability of funds for Japanese firms was falling sharply and there was a risk that tighter financial conditions would hurt the economy. [ID:NT221681]

Japanese consumer prices could temporarily post a year-on-year decline in the fiscal year beginning next April because of falling commodity prices and weak economic growth, Shirakawa said in a speech to business leaders in Fukuoka, southern Japan.

The Bank of Japan cut interest rates for the first time in seven years in October, to 0.3 percent from 0.5 percent, joining global efforts to contain the financial crisis. (Reporting by Leika Kihara; Editing by Rodney Joyce)