TOKYO, June 16 (Reuters) - The Bank of Japan on Tuesday upgraded its economic assessment for the second straight month, as improvements in exports and output fuel hopes the worst of the recession is over.
As widely expected, the central bank kept interest rates at 0.1 percent and held off on new policy initiatives. The rate decision was made by a unanimous vote.
"Japan's economic conditions, after deteriorating significantly, have begun to stop worsening," the central bank said in a statement. In the previous month it said that economic conditions continued to worsen but exports and output appeared to be bottoming out.
In the coming months, Japan's economy is likely to show clearer evidence of levelling out, the BOJ said.
Japan is mired in its worst recession since World War Two but exports and output have shown some signs of recovery, adding to hopes the worldwide slump may be nearing a bottom.
But analysts expect a recovery in the world's No.2 economy to be fragile as many companies have slashed jobs amid weak domestic demand. The economy is expected to grow 0.5 percent in the second quarter after shrinking a record 3.8 percent in January-March, a Reuters poll showed.
Governor Masaaki Shirakawa will hold an embargoed news conference, with his comments expected to come out sometime after 4:15 p.m. (0715 GMT). (Reporting by Leika Kihara; Editing by Hugh Lawson)