MNI POLICY:BOJ Members Concerned with Weak Price, Econ Outlook

     TOKYO (MNI) - Some Bank of Japan board members voiced concerns over the

recent weak development in inflation and outlook of the economy, stopping short

of calling for additional easing policy, according to the summary of opinions

expressed at the bank's policy meeting in Oct 30-31.

     "The current situation where the inflation rate doesn't seem to be

accelerating toward 2% should be taken seriously," one member said. 

     "Although Japan's economy has continued its moderate expansion, the

momentum towards expansion has weakened somewhat recently due to effects from

events such as the natural disasters and trade conflicts between the U.S. and

China," another member said.

     However, the board members didn't discuss additional easing policy and

largely shared the view that the BOJ should maintain the current powerful easing

policy.

     Other key opinions from the meeting summary:

     --"Against the background of trade frictions and rising U.S. interest

rates, the global economy is beginning to level off. Uncertainties regarding

such developments as protectionist moves and negotiations on the Brexit have

heightened since the previous meeting."

     --Japan's consumer prices are expected to continue improving. But the

recent movements "have been weak and unstable. It is projected that achieving 2%

inflation will take some time."

     --"It is important to consider in a flexible manner such factors as the

range of yield movement and the target maturity of Japan Government Bonds in

conducting yield curve control, while maintaining the framework of monetary

easing."

     --"Since regional financial institutions have increased relatively

high-risk loans such as those to mid-risk firms amid the decreasing trend of

lending rates, their profits could worsen faster if the economy moves into a

downturn and credit costs increase. These points warrant careful attention."

     --As a policy tool for addressing the problem of a decline in the

functioning of financial intermediation, the importance of policy prudence

should not be overlooked, although some suggest focusing on such monetary policy

factors as changing the target level of interest rates.

     --"There is also possibility that the degree of transmission from the

output gap to prices has weakened. In this situation, the transmission channel

of inflation through the adaptive formation mechanism may take longer to fully

start working."

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

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

[TOPICS: MAJDS$,MMJBJ$,M$A$$$,M$J$$$]