MNI: BOJ Wakatabe: Must Watch Accumulative Impact Of Easy Pol

     TOKYO (MNI) - Bank of Japan Deputy Governor Masazumi Wakatabe said Monday

that benefits and costs of easy policy will change with the passage of time and

the BOJ must watch for accumulative effects of easy policy.

     Wakatabe told lawmakers that benefits of the easy policy are exceeding

their costs, but prolonged easy policy will put further downward pressure on

profits at financial institutions, and the BOJ must watch accumulative impact of

easy policy.

     He also said that the BOJ's "yield curve policy" is aimed at boosting

inflation expectations and not flattening the yield curve.

     "The BOJ needs to patiently maintain easy policy ,not only to beat

deflation but also to boost inflation expectations. When inflation expectations

rise, the yield curve steepens" and that will be favorable for banks, Wakatabe

said

     Wakatabe, 53, has previously said that the BOJ "without hesitation" should

conduct additional easy policy if necessary to achieve the 2% target. A former

economics professor, the renowned reflationist who has advocated bold monetary

easing to overcome deflation took office on March 20.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: MAJDS$,MMJBJ$,M$A$$$,M$J$$$]