MNI POLICY: BOJ Kuroda: Vital To Maintain Policy; Eye Risks

     TOKYO (MNI) - There is a strong possibility Japan's economy will continue

its moderate expansion, although the BOJ needs to pay attention to developments

around  protectionism and global financial markets, Bank of Japan Governor

Haruhiko Kuroda said Friday.

     Kuroda also warned prices were still slow to pick up, despite Friday's data

showing a modest uptick in headline inflation in September.

     "Compared with the economic expansion and the tightness of labor market

conditions, price moves remained weak," Kuroda said at the credit union meeting

in Tokyo.

     Other key points from Kuroda's speech:

     --It is vital for the BOJ to keep up the momentum toward the 2% price

target, by maintaining the current powerful easy policy.

     --People's inflation expectations are expected to rise once corporate

price-hike moves widen amid the improving output gap, and Japan's inflation rate

rise is likely to accelerate and move toward the 2% price target.

     --July's policy decisions will ensure the stability of economic and

financial conditions, and help achievement the 2% price target at the possible

earliest time.

     --The BOJ will examine the risks considered most relevant to the conduct of

monetary policy and make policy adjustments as appropriate, taking account of

developments in economic activity and prices as well as financial conditions.

     --Financial conditions remain very accommodative, but there are no signs of

overheating asset prices and economic activities.

--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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