*
BOJ must deepen understanding on price moves - March
minutes
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Some members saw positive signs towards achieving price
target
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Board saw need to keep ultra-low rates, warn of
uncertainties
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BOJ kept policy steady at final meeting chaired by Kuroda
(Adds comments from minutes, context on BOJ policy)
By Leika Kihara
TOKYO, May 8 (Reuters) - Several Bank of Japan (BOJ)
board members said the central bank must be vigilant to the risk
of inflation accelerating more than expected, minutes of the
March policy meeting showed on Monday.
A few of the nine-member board also said they saw some
"positive signs" emerging in Japan that suggest the economy was
making progress towards achieving the BOJ's 2% target, the
minutes of the March 9-10 meeting showed.
The board debated how companies were continuing to hike
prices to pass on rising raw material costs, and price increases
broadening to services, the minutes showed.
"It was important to use a wide range of data and look back
on the basic mechanism behind price moves, to deepen our
understanding on inflation developments," one member said.
At the March meeting, the BOJ maintained its ultra-loose
policy, including a 0.5% cap for the 10-year bond yield that had
come under attack from markets betting on a near-term interest
rate hike in the wake of recent rises in inflation.
While some saw positive signs emerging on the price front,
many members said there was "extremely high" uncertainty over
Japan's economic outlook that warranted keeping monetary policy
ultra-loose, the minutes showed.
"The BOJ must focus on the risk of missing the chance of
achieving its price target with a premature policy shift, rather
than that of being too late in modifying policy," one member was
quoted as saying.
Another member said any debate of a policy shift must be
made cautiously as a reversal of ultra-loose policy would have
wide-ranging effects on the public, the minutes showed.
The March meeting was the final one chaired by Haruhiko
Kuroda, who retired as governor in April and was succeeded by
Kazuo Ueda.
Markets are rife with speculation that Ueda will steer the
BOJ away from the radical stimulus measures deployed by Kuroda,
which is drawing increasing criticism for distorting market
pricing and crushing financial institutions' profits.
(Reporting by Leika Kihara; Editing by Christian Schmollinger
and Sam Holmes)
