Dec. 24 (Bloomberg) -- Japanese Prime Minister Junichiro Koizumi told Bank of Japan Governor Toshihiko Fukui that the government and the central bank should work together to support the economy, Fukui said.

Koizumi said the government and the bank should ``continue to join hands and work together next year'' to boost the world's second-largest economy, Fukui told reporters today at the prime minister's residence in Tokyo after a luncheon meeting.

Finance Minister Sadakazu Tanigaki and Economic and Fiscal Policy Minister Heizo Takenaka also attended the meeting along with other government and central bank officials.

Japan's economic expansion will slow to 1.6 percent in the next fiscal year that starts April 1, 2005, from this fiscal year's projected 2.1 percent growth, the fastest in four years, the Cabinet Office said on Dec. 20.

Fukui said those attending today's meeting didn't discuss whether Japan can end deflation next fiscal year. They also didn't discuss the government's debt sales, he added.

The central bank projected in October that Japan's core consumer prices will gain 0.1 percent next fiscal year, which would be the first gain in eight years, after falling a projected 0.2 percent this fiscal year. Core consumer prices exclude fresh food.

To contact the reporters responsible for the story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net

Last Updated: December 24, 2004 02:00 EST