MNI POLICY: BOJ Kuroda: Japan Prices Weak V Tight Labor Market

     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda said Wednesday that

consumer prices remain weak in Japan when compared with the economic expansion

and the tightness of labor markets.

     "Weak price moves continue but prices for processed foods are raising. If

price hike moves expand, corporate and household inflation expectations will

rise gradually," Kuroda said at the Trust Companies Association of Japan.

     Kuroda, however, said that it will take time to achieve the 2% price

stability target.

     "Various risks, including overseas economies, persist. We will manage

monetary policy appropriately to keep a positive output gap as long as possible,

while paying attention to the benefits and costs of monetary policy," Kuroda

said.

     He added, "It is appropriate for the BOJ to patiently maintain the current

powerful easy policy."

     As for the economic climate, Kuroda repeated his comments made at the BOJ

quarterly branch managers' meeting Monday, saying Japan's economy is expanding

moderately, with a virtuous cycle from income to spending still operating,

although exports and production have been affected by the slowdown in overseas

economies. Japan's economy is likely to continue its moderate expansion.

     But he said, "Domestic demand is expected to maintain a rising trend.

Overseas economies are likely to grow moderately on the whole, thanks to the

economic stimulus measures in China."

--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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