BOJ Sakurai: Japan Far From 2% Target; Maintain Easy policy

--BOJ Board Member Plays Down Need for Further Easing Now

     HAKODATE, Japan (MNI) - Bank of Japan board member Makoto Sakurai said

Wednesday that Japan is still far from achieving its 2% consumer price target,

which the BOJ must take seriously, and so it is vital for the central bank to

maintain its current highly accommodative monetary policy.

     In a speech to business leaders in Hakodate City, northern Japan, Sakurai

said, "Price moves remain weak and there is a long way to go to achieve the 2%

price target and we need to take that fact seriously."

     However, Sakurai played down any imminent need of additional easing,

saying, "The economy is improving steadily and the process of moving toward the

target is improving steadily. It is vital to continue to pursue the aggressive

easing policy under the current policy framework."

     Sakurai, seen as a strong supporter of the government's reflationary

policy, including the easy monetary policy championed by BOJ Governor Haruhiko

Kuroda, also said that the central bank should stick to its 2% price target,

judging from external and internal conditions.

     At the latest policy-setting meeting on Sept. 20-21, the BOJ board decided

in an 8-to1 vote to maintain its current monetary policy stance under the yield

curve control framework it adopted about a year ago.

     One of the two new board members, Goushi Kataoka, dissented, arguing

current policy was insufficient to meet the central bank's 2% policy goal by the

current target date of sometime in fiscal 2019, according to the BOJ's policy

statement following its meeting.

     Kataoka was quoted as citing "an excess supply capacity in capital stock

and the labor market" as the reason for his objection but the statement didn't

show any counter-proposals made by him.

     In July, the BOJ pushed back the timeframe for hitting the 2% inflation

target to "around fiscal 2019" from the previous estimate of "around fiscal

2018." It was the sixth delay since the bank began aggressive easing in April

2013.

     Kataoka also opposed the description of the board's inflation outlook.

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com

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