BOJ's Shirakawa: Japan's positive cycle weakening

TOKYO (Reuters) - Japan's positive economic cycle of production, incomes and spending has recently been weakening, with industrial output essentially flat, Bank of Japan Governor Masaaki Shirakawa said on Wednesday.

He was responding to a question at a news conference about the lack of a mention of a positive cycle in the BOJ's twice-yearly outlook report on the economy and prices released earlier in the day.

Shirakawa also said he considered downside risks to the economy greater than upside risks in the fiscal year that started on April 1.

Earlier the BOJ board left its interest rate target unchanged at 0.5 percent, as widely expected.

(Reporting by Hideyuki Sano, Yoko Nishikawa and Yuzo Saeki)