MNI POLICY: BOJ Kuroda: More Positive Towards Easing If Need

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

bank had given greater clarity to its stance of taking additional easy policy

without hesitation, as downside risks to economic activity and prices are

greater, saying the clarification meant he is now more positive on additional

easing than before.

     "Downside risks concerning the global economy are greater due to various

factors, such as protectionist moves and geopolitical risks, and the BOJ needs

to pay more attention to downside risks than before," Kuroda said.

     "If the risk raises that the momentum toward achieving the 2% price target

will be lost, (the BOJ) without hesitation will conduct additional easy policy,"

he added.

     Kuroda laid out reasons for the BOJ keeping monetary policy unchanged,

saying that the momentum towards the 2% price target is maintained and the

output gap remains in positive territory.

     The BOJ backed away from any pre-emptive easing measures Tuesday, leaving

policy unchanged, as the economy continues to expand moderately, underpinned by

solid domestic demand, although it admitted to greater downside risks to both

activity and prices.

     Other key points from Kuroda's presser:

     --Kuroda cited the output gap and inflation expectations as the two vital

factors of determining the momentum toward achieving the 2% price target.

     --If positive gap continued, it would increase corporate price- and

wage-setting stance, which in turn will increase prices. Higher prices would

increase firms' and households' inflation expectations.

     --If downside risks to the global economy continued and uncertainties over

the global economy are prolonged, it would weaken the momentum toward hitting

the 2% price target.

     --The baseline economic recovery remains intact but the timing of a pickup

in global economy might have been delayed slightly.

     --Kuroda cited four tools as additional policy, saying lowering short- and

long-term interest rates, expanding the asset purchases and accelerating the

pace of injecting monetary based.

     --Kuroda also said that the BOJ policy decisions will not be directly

influenced by policy decisions by the U.S. Federal Reserve and the European

Central Bank.

     --He added that central banks are managing monetary policy to ensure the

stability of prices and economy and timely decisions by the Fed and ECB will

have positive impact on the global and Japanese economies.

     --Kuroda said that the BOJ must pay attention to how their policy decisions

affect the global financial markets and Japan's economic fundamentals, including

the momentum for the 2% price target.

--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: MMJBJ$,M$A$$$,M$J$$$,MT$$$$]