The Bank of Japan will conduct monetary policy changes "slowly" by closely monitoring the economic and financial climate, with "very low" interest rates likely to continue "for a while," BoJ deputy governor Toshiro Muto said. In a speech to a business community in Kyoto in western Japan, Muto also repeated the central bank's latest stance that BoJ policymakers have no "preset" timing for a future rate hike in mind. "About the timing of monetary policy changes, we don't have any preset idea," Muto said. "If economic developments move in line with our forecasts in the April (semi-annual) outlook report, there is a high possibility that the current very low interest rates will be maintained for a while." He said the BoJ will "make adjustments to interest rates slowly by watching economic and financial conditions." The only slight hint Muto might have dropped is that the central bank is unfazed by a large-scale revision to the consumer price index announced by the government in August, saying the bank's policy remains "forward-looking" and suggesting that it would not be tied to lagging indicators, such as the CPI. He said the price trend is still "positive" as Japan is moving out of years of deflation. "This revision has not made any changes to our outlook for prices," said Muto. "The revision is a technical issue and it's not that the actual (economic) condition has changed." Downward pressures from falling unit labor costs should also ease and recent surveys of companies and households have shown that they expect prices to rise, he added. Japan's core CPI for August rose 0.3 pct from a year earlier after a 0.2 pct gain in July, up for the third consecutive month under a new formula and using 2005 as base year. Muto also said the money market has "stabilized" after an initial jump in short-term rates following the bank's first rate hike in six years in July. The deputy chief presented an optimistic outlook for Japan's economic expansion that began in early 2002 and is set to become the longest post-war stretch of growth next month. "Japan's economy has been moving in line with our April outlook report," he said, adding that the soft spot in the economy -- slumping retail sales -- has been caused mainly by the prolonged rainy season and should be "temporary." The BoJ's nine-member policy board will update their forecasts in the outlook to be released Oct 31. In April the board projected Japan's real gross domestic product will grow 2.4 pct in the current fiscal year to March 2007 before slowing to 2.0 pct in the next financial year. It forecast the core CPI, which excludes volatile fresh food prices but includes gasoline and heating oil costs, will rise 0.6 pct in fiscal 2006 and 0.8 pct in fiscal 2007