MNI REVIEW: BOJ Kuroda Lowers Hurdle To Additional Easing

     TOKYO (MNI) - Bank of Japan Governor Haruhiko Kuroda admitted Tuesday that

he lowered the hurdle to taking additional easy policy, as Japan's economy now

faces greater downside risks than in April.

     Kuroda told reporters that the bank had given greater clarity to its stance

on taking additional easy policy without hesitation, as downside risks to

economic activity and prices have grown, saying the clarification meant he is

now more positive towards additional easing.

     The BOJ added the new paragraphs to a policy statement, saying, "In

particular, in a situation where downside risks to economic activity and prices,

mainly regarding developments in overseas economies, are significant."

     --NO HESITATION

     "The bank 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." Kuroda said, flagging that the BOJ will consider taking

pre-emptive additional easy policy before the risk materializes.

     Kuroda noted that momentum hasn't yet been lost but said if that risk

increased that it might, the BOJ "without hesitation will conduct additional

easy policy".

     His previous remarks suggested the Bank would act with hesitation "if the

momentum was lost".

     It is still uncertain when and how the global economy may pick up and a

prolonged slowdown will increase the risk that the BOJ faces a severe challenge

of dealing with an economic downturn in coming months.

     When asked about policy options, Kuroda repeated the four tools that he has

previously noted, such as lowering the short-term and long-term policy interest

rates, expanding the asset purchases and accelerating the pace of injecting

monetary base.

     He didn't touch on extending the period of "the forward guidance for policy

rates," which is the similar to "the time duration effects", but it certainly

remains one of the additional easy policy options available to the BOJ.

--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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