The Bank of Japan vowed on Wednesday to take necessary steps to reduce volatility in bond markets that has threatened to jeopardise the government's fight to end deflation and revive growth. The central bank upgraded its assessment of the economy for a fifth straight month, saying it "has started picking up," as Prime Minister Shinzo Abe's policy prescription of aggressive fiscal and monetary stimulus has boosted sentiment and a weaker yen has halted a decline in exports.