MNI POLICY: BOJ Kuroda: Won't Hesitate to Act

     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda has maintained his

bright outlook for Japan's economy and prices, but says the BOJ will not

hesitate to take additional easing measures if needed.

     "Japan's economy is likely to continue on a moderate expanding trend, as

the impact of the slowdown in overseas economies on domestic demand is likely to

be limited," Kuroda said at the opening of the quarter branch managers' meeting

on Wednesday.

     In additional comments, Kuroda said: "The BOJ will adjust policy in order

to keep the momentum toward achieving the price stability target."

     Kuroda largely repeated his previous remarks on economic conditions and the

conduct of monetary policy.

     The key points in Kuroda's remarks were:

     --"The BOJ will not hesitate to take additional easing measures if there is

a greater possibility that the momentum toward achieving the price stability

target will be lost amid large downside risks to economic activity and prices."

     --"The BOJ expects short and long-term interest rates to remain at their

present or lower levels as long as it is necessary to pay close attention to the

possibility that the momentum toward achieving the price stability target will

be lost."

     --Kuroda also said that Japan's consumer price is likely to increase

gradually toward 2%, mainly on the back of the output gap remaining positive and

rising expectations for medium to long-term inflation.

     --Japan's financial system remains stable and the financial environment is

extremely accommodative.

     --Japan's economy has been expanding moderately with a virtuous cycle from

income to spending, although exports and production have been affected by the

slowdown in overseas economies. 

--MNI Tokyo Bureau; tel: +81 90-2175-0040; email: hiroshi.inoue@marketnews.com

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

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