MNI POLICY: See Bright Signs; Elevated Risks Still: BOJ Kuroda

     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda said Thursday that

bright signs have been seen overseas but risks are still large and at high

levels, and the BOJ must guard against the downside risks.

     According to Kuroda, the BOJ must maintain its policy easing bias as the

uncertainties continue, with a deepening of the negative interest rate just one

policy option but said it will consider more easing after carefully examining

the favorable pros and cons.

     Other key comments from presser

     --The BOJ must maintain its 2% price target and doesn't need to shorten the

10-year policy interest rate goal i has now. The International Monetary Fund

said on Nov. 25 that the BOJ could consider shifting its JGB target from the

10-year note to shorter maturity bonds so as to mitigate the impact of prolonged

easy policy on profits at financial institutions. The IMF also called on the BOJ

to introduce an inflation target range, instead of the current 2% price target,

to increase the flexibility of monetary policy. These comments from Kuroda were

in line with and MNI Insight piece on Dec 17.

     --Kuroda said that he doesn't mind the super long-term interest rates to

rise further or the yield curve steepens.

     --Brighter signs are observed overseas following a partial trade deal

between the U.S. and the China and the result of the U.K. elections.

     --"Downside risks somewhat fell but they are still large and at high

levels. The BOJ must guard against the risks and must pay attention to

developments of overseas economies," Kuroda said.

     --Kuroda said he doesn't expect the timing of a pick-up of overseas

economies to  quicken from around mid-2020.

     --"Japan's economy is expanding moderately. The BOJ has shifted policy bias

toward easing since July when downside risks to overseas economies had

increased." "Uncertainties are still high and it is appropriate for the BOJ to

maintain easing bias," Kuroda said.

     --The BOJ will factor the impact of government economic stimulus measures

on the economy in January when the BOJ board reviews its medium-term outlook to

be made at the January 20-21 policy-setting meeting.

     --The Chinese economy continues slowing but there is no risk that economic

activity will stall in China.

--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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