MNI POLICY: BOJ Aide Warns Real Estate Loans; Watch For Moves

     TOKYO (MNI) - A senior Bank of Japan official Wednesday warned that

financial institutions' loans to real estate businesses, which are long-term

lending, continued to post strong growth beyond that seen in overall lending.

     "The loans to real estates vs. gross GDP is beyond the historical trend and

is the highest level since the asset bubble period," the executive director in

charge of the financial system and bank examination Kimihiro Etoh said at a

credit union association meeting.

     Etoh also said that the BOJ continues to closely watch how loans to real

estate develops and its impact on financial institutions.

     As for the economic climate and the outlook for monetary policy, Etoh said

that there are uncertainties regarding global developments and medium- to

long-term inflation expectations, and the BOJ must pay attention to

developments.

     He added, "The policy-decision meeting is being held today and tomorrow. We

will continue to make efforts to manage monetary policy in an appropriate manner

in order to achieve the price stability target, while keeping a close eye on 

economic and price conditions as well as financial environment."

--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$$$,M$J$$$]