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    Primary Navigation Secondary Navigation Search: Japan's central bank wary of coordinated rate cuts by Shingo Ito Tue Oct 7, 7:15 AM ET TOKYO (AFP) - The financial crisis will delay Japan 's economic recovery but coordinated global interest rate cuts are not the answer, the country's top central banker said Tuesday. Meeting amid fresh turmoil on world markets, the Bank of Japan left its super-low interest rates unchanged at 0.5 percent -- the lowest among major economies -- where they have been since February 2007. The world's second-largest economy has already been sluggish due to a slowdown in the global economy, high energy and raw materials costs as well as weakening exports, Bank of Japan governor Masaaki Shirakawa said. "We are now forecasting that an economic recovery will come a little bit later than we had originally anticipated," he told a news conference . The BoJ's decision to stand pat came soon after the Nikkei index plunged below 10,000 points for the first time in almost five years. The index, which was down more than five percent at one point, ended 3.03 percent lower. "We will closely monitor the movements of share prices and their impact," Shirakawa said. Although Japanese share prices have fallen sharply, the country's banks have been less badly affected so far by the financial mayhem than their US and European counterparts. There is growing speculation that the world's top central banks may step up joint efforts to try to contain the mayhem on global financial markets . Investors in particular are looking for any hints of possible coordinated interest rate cuts to try to shore up markets and the economy. Finance chiefs from the Group of Seven rich nations are set to meet Friday in Washington. But Shirakawa said central banks should set monetary policy based on the health of their own economies. Joint action may result in one country doing something that is not favourable for its own economy, he said, adding: "Each country will make its own decision considering its own conditions." Analysts said the BoJ was unlikely to join any joint monetary easing. "There has been some speculation that the BoJ will engage in coordinated rate cuts amid the mounting turmoil among US and EU financial institutions ," noted Barclays Capital's chief Japan economist, Kyohei Morita . "Although such a possibility cannot be completely ruled out, we believe it remains unlikely," he wrote in a note to clients. Shirakawa stressed that the central banks of Japan , Europe and the United States have already been working together to supply emergency funds to the markets in an effort to ease the financial turmoil. On Tuesday, the Bank of Japan injected emergency funds into the short-term money market for a 15th straight day, adding 1.0 trillion yen (9.8 billion dollars) to try to prevent a domestic credit crunch . Japan's economy suffered its worst contraction in seven years in the second quarter of this year, teetering on the verge of recession. A key gauge of the health of the Japanese economy suffered the biggest drop on record in August, government figures showed Tuesday. The composite index of coincident economic indicators , which compiles data such as new job offers and consumer sentiment, fell 2.8 points from July to 100.7, the cabinet ministry said. It was the largest drop since comparable records began in January 1980. Prime Minister Taro Aso said Tuesday that Japan's economy was solid but the global financial crisis could sap demand for exports. "The financial system in Japan itself is sound," Aso told a parliamentary committee. But the global crisis "will surely affect the real Japanese economy," he said. "We must carefully monitor the situation and take appropriate action when needed." RECOMMEND THIS STORY Recommend It: Average ( Not Rated ) AP AP AP AP AP AP Reuters AP AP Reuters Reuters - Tue Oct 7, 7:03 PM ET ABC News - Tue Oct 7, 9:31 PM ET FOXBusiness - Tue Oct 7, 7:03 PM ET Reuters - Tue Oct 7, 6:31 PM ET Bank of Japan (BoJ) Governor Masaaki Shirakawa speaks at a press conference at the bank... Business Video News Search Related Searches: RELATED QUOTES 9447.11 -508.39 1754.88 0.00 996.23 0.00 Delayed Data - Yahoo! News Topic Pages In-depth coverage on topics including , , and . Elsewhere on the Web ABC News: FOXBusiness: Time.com: Yahoo! Autos Check out the 2008 & 2009 models on Yahoo! Autos. ADVERTISEMENT Free 2-week trial! Free delivery, no late fees, return in-store or mail! Start today. NEWS ALERTS Get an alert when there are new stories about: Kyohei Morita Nikkei index economic indicators Bank of Japan governor Masaaki Shirakawa emergency funds - - Search: Primary Navigation Copyright © 2008 . All rights reserved. The information contained in the AFP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of Agence France Presse.