* BOJ will keep focus on easing funding strains - Kuroda
* Govt to assist in auto sector funding - spokesman Suga
* Don't see need for BOJ to start buying municipal bonds - Kuroda
* Finmin Aso rules out near-term chance of tax cuts (Adds govt spokesman comments in paragraphs 2-4; context on economy and auto sector in 5-6, fiscal policy in 15-18)
By Leika Kihara
TOKYO, May 12 (Reuters) - The Bank of Japan will do "whatever it can" to mitigate the growing fallout from the coronavirus pandemic, Governor Haruhiko Kuroda said on Tuesday, warning that a collapse in global activity has had severe consequences on the economy.
The government will also use all available tools to help Japan's car and autoparts makers hit by supply chain disruptions, slumping demand and factory shutdowns caused by the health crisis, its top spokesman said.
"The industry is suffering deeply from sluggish U.S. and European sales, and suspension in domestic output," Chief Cabinet Secretary Yoshihide Suga told reporters on Tuesday.
"We'll deploy all policy means to assist in their accessing funding," such as through financial aid and payouts, he said.
The remarks came as earnings announcements underscored the damage the pandemic has inflicted on Japan's big automakers including Toyota Motor Corp, which expects profit to drop 80% to its lowest in nine years.
A key indicator gauging the state of the economy fell at the fastest pace in 9 years, data showed on Tuesday, forcing the government to warn of a deep recession as the virus takes a heavy toll on business activity and consumption.
In a semi-annual testimony to parliament, Kuroda said Japan's economy was in an "increasingly severe state" as the pandemic paralyses global activity.
The BOJ has various tools at its disposal if it were to ramp up stimulus such as accelerating money printing, increasing market operation tools and cutting interest rates, he said.
With companies continuing to hoard cash to guard against the risk of a prolonged shut-down in businesses, the BOJ will focus on steps to ease corporate funding strains rather than stimulate demand, he said.
"What's most important for us is to take steps to smoothen corporate financing and stabilise markets," Kuroda said. "We will do whatever we can as a central bank, working closely with the government."
Kuroda ruled out the possibility of adding municipal bonds to the list of assets the BOJ buys, however, saying he saw no need to do so for the time being.
The world's third-largest economy is on the cusp of a deep recession, as the pandemic forces households to stay home and businesses to shut down.
While the government plans to lift the state of emergency for some prefectures that saw infection numbers stabilise, many big cities including Tokyo will likely see current restrictions kept in place at least for the rest of this month.
The BOJ expanded stimulus for the second straight month in April. For both months, it focused on steps to ease corporate funding as efforts to prop up demand would run against government requests for households to stay home.
Prime Minister Shinzo Abe has pledged to take additional fiscal stimulus measures to combat the fallout from the pandemic, which would come on top of a record $1.1 trillion package focusing on cash payouts to citizens.
The move is in response to growing pressure from lawmakers for bolder steps to cushion the blow from the pandemic.
Some politicians have called for cutting the sales tax, which was raised to 10% last October to rein in the country's huge public debt that is twice the size of its economy.
"Japan's fiscal condition is in a severe state and will likely turn more dire due to the pandemic," Finance Minister Taro Aso told parliament on Tuesday. "Cutting tax isn't something I have in mind for the time being," he said.
About 15,847 coronavirus infections and 633 deaths have been confirmed in Japan as of Monday, excluding cases from a cruise ship previously quarantined in Yokohama, according to NHK. (Reporting by Leika Kihara, Additional reporting by Kaori Kaneko and Kazuhiko Tamaki, Editing by Gerry Doyle and Jacqueline Wong)