HIROSHIMA, Japan, July 25 (Reuters) - Bank of Japan Deputy Governor Hirohide Yamaguchi said on Wednesday the central bank will ease monetary policy further if the yen's rise severely threatens Japan's path towards a moderate economic recovery.
But Yamaguchi said a decision on whether further monetary stimulus is necessary is not imminent.
"What's important is to carefully scrutinise how the yen's rise affects Japan's economy," Yamaguchi told a news conference after meeting business leaders in Hiroshima, western Japan, adding that the strengthening of the yen alone would not immediately trigger monetary easing.
The BOJ said it wanted to see inflation rise to 1 percent and eased monetary policy via an increase in asset purchases in February, and followed up with another easing in April to show its resolve to beat deflation, which has stifled the economy for much of the past two decades.
The central bank has held off on further easing since then despite slowing global growth that has driven other major central banks to loosen policy, convinced that spending for rebuilding from last year's earthquake will keep Japan's economy on track for a moderate recovery.
Yamaguchi, one of the BOJ's two deputy governors, is a key figure to watch for signals on the future direction of monetary policy. Markets count him among those board members who are more eager to ease preemptively when needed to support the economy. (Reporting by Leika Kihara; Editing by Shinichi Saoshiro and Michael Watson)