MNI POLICY: BOJ Keeps Policy Unch; To Buy JGBs At Y80 Trln

     TOKYO (MNI) - The Bank of Japan board decided Wednesday in a 7-to-2 vote to

stand pat on monetary policy, leaving yield curve control the asset purchases

unchanged, as Japan's economy is expanding moderately, despite the downside

risks.

     The BOJ vowed to maintain its current easy policy "for an extended period

of time," taking into account uncertainties regarding economic activity and

prices, including the effects of the consumption tax hike planned for October

2019.

     The key points from the BOJ board decision, which came after the latest

two-day policy meeting that ended Wednesday:

     --Under the yield curve control framework adopted in September 2016, the

BOJ will keep the target for the overnight interest rate at -0.1%.

     -- The BOJ will continue buying JGBs to stabilize the 10-year yield "around

zero percent" but it will also allow the long-term interest rate to "move upward

and downward to some extend" in line with the changes in economic growth and

inflation.

     -- Officially, the BOJ will maintain the annual pace of its JGB purchases

at around Y80 trillion, although the pace has declined sharply as the

accumulated effects of keeping rates down with asset purchases have intensified.

The bank noted it will conduct the purchases "in a flexible manner."

     -- The BOJ maintained "forward guidance" for policy rates, showing that the

BOJ vows to keep the current easy policy for an extended period of time.

     -- On forward guidance, board member Yutaka Harada, a former government

economist, dissented, arguing that it would be better to adopt guidance that

would "further clarify its relationship" with the inflation target. Goushi

Kataoka, a former private-sector economist, also opposed. He repeated his

opinion that it would be better to promise additional easing in the event of a

downward revision to the board's longer-term inflation outlook.

--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

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