PREVIEW-BOJ to hold rates, debate slowing economic growth

*What: Bank of Japan two-day monetary policy meeting

*When: April 8-9. Rate decision likely noon -- 2 p.m. (0300-0500 GMT)

*BOJ's overnight call rate seen steady at 0.5 percent

By Leika Kihara

TOKYO (Reuters) - The Bank of Japan is expected to keep interest rates on hold and debate mounting risks to growth at a rate review next week, set to be held without a permanent governor as the post has been left vacant due to political wrangling.

Masaaki Shirakawa, deputy governor and acting head of the bank, will chair the two-day meeting that ends on Wednesday which, among other issues, will likely discuss how much the BOJ might need to cut its economic forecast in a twice-yearly outlook report due out later this month. [nT55777]

A stronger yen and rising raw material costs have clouded the outlook for corporate activity, a key driver of the economy, heightening views that Japan may follow the United States into a recession and prompt the BOJ to cut rates later this year.

But the central bank is expected to keep its key policy rate unchanged at 0.5 percent until clearer signs of economic trouble become evident.

"There is obviously very little the BOJ can do to help the economy with interest rates already so low," said Koichi Haji, chief economist at NLI Research Institute.