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By Leika Kihara

TOKYO, June 11 (Reuters) - The Bank of Japan looks set to hold off on new initiatives at its next policy review and may strike a slightly more upbeat tone on the economy as rising exports and output encourage hopes that the worst of the recession is over.

The central bank is widely expected to keep its benchmark overnight call rate target unchanged at 0.1 percent when it meets on Monday and Tuesday next week.

Here are some possible outcomes from the meeting, as well as expected market reactions:

BOJ UPGRADES ECONOMIC VIEW

The most likely outcome is for the BOJ to use less pessimistic wording to describe the economy than it did last month, when it said things were worsening.

That would reflect improvements in exports and a sharp rebound in output, as companies restock after a heavy rundown of inventories since late last year.

But any change in phrasing will be minor as the BOJ remains cautious on the outlook. Kazuo Monma, the BOJ's chief economist and the main compiler of its monthly report on the economy, said on Wednesday it is too early to conclude that the economy has hit bottom.