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     TOKYO (MNI) - Heighted downside risks to economic activity and prices
prompted Bank of Japan board members to discuss the outlook for monetary policy,
although they didn't see the need for imminent action, the summary of opinions
from the March 14-15 policy meeting released Tuesday showed.
     A few policymakers emphasized the need of a policy mix stemming from
monetary and fiscal policies to cope with an economic downturn.
     The BOJ board remains focused on the impact of the China's economic
stimulus measures on Japan's exports and production.
     At the meeting, the BOJ left monetary policy unchanged, voting 7-2 to
continue with yield curve control and the asset purchases, as Japan's economy is
expanding moderately, despite heightened downside risks.
     The BOJ board maintained the overall economic assessment, saying "Japan's
economy is expanding moderately, with a virtuous cycle from income to spending
operating," adding that the economy "is likely to continue its moderate
     In the wake of weaker data, the BOJ lowered its assessment of exports and
industrial production, reflecting slowing economies in China and Europe.
     Other key points from the summary of opinions:
     --"In case developments in economic activity and prices undergo a phase
shift, it is important to make pre-emptive policy responses."
     --"In the current situation where downside risks are materializing, the BOJ
should be prepared to make policy responses. If there are concerns that the
inflation momentum will be lost, the BOJ should decisively conduct additional
easing and clearly argue against claims that there is a limit to monetary
     --"It is necessary to maintain the current monetary easing policy, paying
more attention than before to the side effects on financial institutions and
market functioning while cautiously examining economic developments for the time
being. In addition, it is important that the macroeconomic policy framework - a
policy mix of monetary and fiscal policies - continue to be sustained."
     --"Taking account of current developments in economic activity and prices,
there is some risk that the scheduled consumption tax hike will exert downward
pressure on economic activity and prices. It is important for fiscal and
monetary policies to further coordinate and stimulate aggregate demand in a
situation where early achievement of the price stability target cannot be
     --It is necessary to pay attention to the impact of the Chinese stimulus
     --"It is worth paying attention to when China's measures to support
economic activity from both the fiscal and financial sides will become
effective, as well as their impact on the economy."
     --The BOJ should be more vigilant than before about downside risks to
economic activity and prices at home and abroad.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
--MNI London Bureau; tel: +44 203-586-2225; email: