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--Adds Comments From Briefing in Paragraphs 3, 5
     OKAYAMA, Japan (MNI) - Bank of Japan board member Goushi Kataoka made the
following points in his speech to business leaders in Okayama City, western
Japan, Thursday. After joining the bank's nine-member board in July, he has
dissented at every policy meeting, although he hasn't formally proposed any
specific policy action.
     -- Additional monetary easing is necessary to achieve the 2% inflation
target at an early stage as the bank's inflation-overshooting commitment
(continuing large-scale easing until the annual inflation rate exceeds 2% and
stabilizes around 2%) "hasn't been sufficient" to clearly increase inflation
     Later at a news conference, Kataoka declined comment on how and when he
might propose more easing. He said: "The future policy is up to the developments
in economic, financial and financial market conditions." He said there is no
need to remove the bank's guideline on the annual pace of its Japanese
government bond purchases at "around Y80 trillion" even though the bank has
slowed the pace to around Y50 trillion as the 10-year JGB yield has been
relatively stable around zero percent, the official target.
     -- Kataoka repeated his view that the BOJ should buy Japanese government
bonds so that the yields on JGBs with maturities of 10 years and longer will
broadly be lowered further.
     Later, he told reporters it would not be appropriate to comment on how much
those yields should be lowered at this point.
     -- He also repeated his outlook that "the possibility of the year-on-year
rate of change in the CPI increasing to 2% through fiscal 2019 is low." At its
last policy meeting on Jan. 22-23, the BOJ board maintained its medium-term
growth and inflation projections, repeating what many see as an optimistic
outlook that the bank can hit the inflation target "around fiscal 2019 (to March
31, 2020)."
     -- On the eventual exit from aggressive easing, Kataoka said the BOJ is
still far from considering a change in the current easing stance because
inflation "remains distant from 2%." If the direction of monetary policy is
changed without deep consideration, there is a risk of the economy slipping back
into deflation, he argued.
     -- The government's plan to raise the sales tax further to 10% from the
current 8% in October 2019 could increase downward pressure on prices by
hampering a further widening of the positive output gap and a rise in inflation
expectations. The last sales tax hike, to 8% from 5% in April 2014, caused a
prolonged slump in consumer spending.
--MNI Tokyo Bureau; tel: +81 90-2175-0040; email:
--MNI Tokyo Bureau; tel: +81 90-4670-5309; email:
[TOPICS: MAJDS$,MMJBJ$,M$A$$$,M$J$$$,MT$$$$]

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