FACTBOX-Recent comments on Japan monetary policy

(For more stories on the Japanese economy, click [ID:nECONJP])

April 7 (Reuters) - The Bank of Japan is likely to weigh its worst ever tankan business confidence survey when it reviews interest rates at a meeting ending on Tuesday, but it is seen deferring any attempt to ease pressure on companies until later in the April-June quarter. [ID:nT26140]

Following are recent key comments by BOJ and Japanese government officials on monetary policy and the economy:

FINANCE MINISTER KAORU YOSANO, March 27

"I believe it's too early to describe the 0.1 percent decline (in core-core consumer price index) as a state of deflation."

BOJ GOVERNOR MASAAKI SHIRAKAWA, March 25

Asked if the BOJ may revert to zero interest rate or quantitative easing policies: "I cannot say that we will or will not adopt these policies in the future.

"At the moment, we are not facing risks of a deflation spiral. But we will continue to closely monitor developments in prices and the economy."

BOJ DEPUTY GOVERNOR HIROHIDE YAMAGUCHI, March 25

"Our policy rate is 0.1 percent but that's not to say we have absolutely no room for further rate cuts. At this point, we haven't completely ruled out this policy option.

"Japan's economic and financial conditions are likely to remain severe. In the near term our policy steps will focus on measures to stabilise the financial system and ease corporate funding conditions. The BOJ will take necessary steps decisively without having any preconceived ideas, while carefully examining conditions in financial markets and corporate finance ...

"I'm often asked whether this crisis will lead to a depression like in the 1930s ... Unlike then, many countries now have frameworks to protect depositors and are also injecting public funds into banks."

FINANCE MINISTER YOSANO, March 19

After a BOJ decision to increase purchases of Japanese government bonds: "It will clearly curb a rise in long-term interest rates, having a favourable effect on rates not only on government debt but also on corporate bonds."

The BOJ decided at a policy-setting meeting that ended on March 18 to increase its buying of government bonds by nearly a third to 21.6 trillion yen ($215.2 billion) a year. [ID:nT8455]

SHIRAKAWA, March 18, after a policy-setting meeting

"I'm not considering reviewing the bank note rule (to cap the BOJ's JGB holdings below the amount of notes in circulation) at all.

"We didn't have in mind any influence on the level of long-term interest rates through today's action. Take 10-year interest rates for example, they depend on views on the economy and prices in the next 10 years.

"The economy is clearly in a very severe situation now. As we continue extraordinary policy steps, we must ultimately consider an exit strategy as well ...

"But we won't discuss an exit strategy at this stage. I'll first design an appropriate entrance and carry out my job on that."

BOJ BOARD MEMBER MIYAKO SUDA, March 4

Asked if quantitative easing or a zero-rate policy were options given debate overseas about their effectiveness: "We need to think about whether these policies were effective and whether there were any side effects. Depending on economic conditions, I cannot deny the possibility of these policies being adopted.

"For Japan, looking at our experience in the past, it did lead to positive developments, such as rises in capital spending and an improvement in job conditions ... Especially for quantitative easing, it helped lay the groundwork for an economic recovery by easing jitters over liquidity and ensuring financial system stability.

"I don't think taking these steps would be effective now. But as for the future, we don't know what will happen so it's best not to rule out anything.

"When uncertainty is high, our policy should be based on a gradualist approach, carefully examining the current situation ...

"Japan's economy fell off a cliff into a deep valley and is wandering through mud amid deep fog." (Reporting by Yuzo Saeki)