REPEAT: MNI 5 THINGS: BOJ Ops: Yen, Stocks Could Delay 2% CPI

Repeats Story Initially Transmitted at 06:34 GMT Mar 19/02:34 EST Mar 19

     TOKYO (MNI) - Sentiment and exporter profits would fall if the yen rise and

stock market slump continued, which could limit wage and retail price hikes and

delay the timing of the Bank of Japan achieving its 2% inflation target, the

summary of opinions expressed at the bank's March 8-9 policy meeting released

Monday showed.

     At the March meeting, the BOJ board decided in an 8-to-1 vote to maintain

its monetary easing stance under the yield curve control framework it adopted in

September 2016. No change in monetary policy was widely expected. The BOJ

believes large monetary stimulus is still needed to guide low inflation around

1% toward its 2% price stability target.

     Other key points from the summary of opinions:

     -- Japan's core consumer price index (excluding fresh food) will move

toward the 2% target but moves to raise prices have not been pronounced, and it

is likely to take time to dispel the deflationary mindset held among businesses

and households.

     -- There is still a long way to go before the BOJ can anchor inflation

around 2%, so the bank is not at the stage to consider the "normalization" of

large-scale easing. The BOJ must make it clear that unwinding of easy policy in

the future is not the same as tightening of monetary conditions.

     -- If there is a heightened risk that achieving the 2% price target will be

delayed, additional easing will be needed. However, there is not ample room for

further monetary easing. Therefore, fiscal spending is also necessary to

overcome deflation.

     -- In forecasting developments in wages and prices, it is worth paying a

close attention to the results of the annual spring labor-management wage

negotiations. The BOJ must carefully watch how wage hikes will prompt more firms

raise prices and improve consumers' acceptance of price rises. (Early results

came last week).

     -- It will be necessary to consider appropriate policy conduct while taking

into account the side-effects of the easy policy and stronger effects of easy

policy to be caused by higher potential growth rate. Purchase of risky assets,

including ETFs (exchange-traded funds), is a part of the policy package aimed at

achieving the 2% price target. But the BOJ must pay attention to policy effects

and possible side-effects of easy policy.

--MNI Tokyo Bureau; tel: +81 90-4670-5309; email: max.sato@marketnews.com