MNI POLICY: BOJ Opinions: Early Action Eyed; Momentum A Worry

     TOKYO (MNI) - The Bank of Japan should consider pre-emptive consider

additional easy measures, as there is a risk that the momentum toward hitting

the price stability target may be lost, a few board member said at the September

18-19 meeting, according to the summary of opinions released Monday.

     However, they didn't elaborate on what measures the central bank should

consider and how to implement additional easy policy.

     "As there is some possibility that the momentum toward achieving the price

stability target will be lost, the BOJ should examine whether additional

measures will be necessary," one member said.

     Another member said, "At the next MPM, it is important to re-examine

economic and price developments while also taking into account the results of

the Tankan and the reports made at the meeting of general managers of the BOJ's

branches," adding there should be no "preconceptions at this point regarding the

outcome of its examination and future policy conduct."

     The BOJ left monetary policy unchanged at the meeting, but vowed to

re-examine economic and price developments at the next policy meeting in

October, increasing he the possibility it will consider conducting further

easing.

     Other key points from the summary of opinions:

     --"Given the concern that the delay in the recovery in overseas economies

will have a negative impact on Japan's economic activity and prices, it is

necessary to consider desirable policy responses while paying attention to the

side effects," one member said.

     --Another member said, "Both the positive output gap and developments such

as a rise in productivity are existing at the same time. However careful

attention should be paid to the risk that the output gap will narrow led by

external demand."

     --A different member said, "There is no change in the recognition that a

sign of momentum toward inflation becoming strong again has been maintained, but

it is necessary to monitor more carefully than before whether this sign might

fade away."

     --Another member said, "It is important for the BOJ to communicate with an

emphasis that it has not reached an impasse on monetary policy measures in terms

of either short- and long-term interest rates, quantity, or quality and that any

kinds of measures are possible at all times."

     --A different member said, "Given that downside risks to overseas economies

seem to be increasing, it is becoming necessary to pay closer attention to the

environment surrounding Japan's economy. This situation has not been heading

toward alleviation since the previous MPM."

--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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