FACTBOX-Recent comments by Bank of Japan policymakers

Sept 17 (Reuters)

The Bank of Japan may sound a slightly brighter note on the economy on Thursday which combined with improving corporate financing would pave the way for a broader debate next month on whether to start phasing out its corporate fund-support measures.

The BOJ is widely expected to keep interest rates at 0.10 percent on Thursday.

The market's focus is instead on whether the bank will unwind funding measures to ease credit strains, which include buying commercial paper and corporate bonds from banks. These are currently set to expire in December.

Following are recent key quotes by BOJ policymakers on monetary policy and the economy:

BOARD MEMBER MIYAKO SUDA, Sept 9, Nagasaki, southern Japan:

"If we keep abnormal steps longer than needed even after corporate finance conditions have improved enough, their side-effect could outweigh any advantages. We should be careful not to let that happen ... At present, the bank has no predetermined idea about its next move ...

"For the time being, the BOJ needs to maintain a fully accommodative financial environment in order to ensure sustained growth of the Japanese economy under stable price moves, irrespective of whether the BOJ unwinds or extends unconventional policies."

DEPUTY GOVERNOR KIYOHIKO NISHIMURA, Sept 1, Buenos Aires:

"Don't underestimate safety nets -- when market confidence is eroded, investors are excessively averse to uncertainty and tend to 'wait and see' until they feel more confident about making market transactions ...

"When market conditions improve, many (unconventional policies) will eventually be terminated but timing and the sequencing are crucial."

GOVERNOR MASAAKI SHIRAKAWA, Aug 31, Osaka, western Japan:

"At present, Japan's economic conditions are showing some signs of recovery. At the same time, the Bank fully recognises that the outlook is associated with great uncertainty ...

"The bank will pay attention for the time being to downside risks to economic activity and prices, and continue to do its utmost as the central bank to bring Japan's economy back to a sustainable growth path with price stability."

BOARD MEMBER ATSUSHI MIZUNO, Aug 20, Okayama, western Japan:

"With interest rates very low at 0.1 percent, there is very little that monetary policy can do to create demand ... We don't have any tools with which to push up prices or stimulate the economy short term. We need to fight this with a long-term perspective, given severe conditions after the global financial crisis ...

"If there was an increasing possibility of the economic and price outlook undershooting forecasts, one option for a central bank would be to announce its commitment to maintaining very low interest rates."

BOARD MEMBER TADAO NODA, July 30, Matsumoto, central Japan:

"The BOJ has policy tools only to influence short-term interest rates, basically through a target rate," Noda told a news conference after meeting business executives in Matsumoto, central Japan.

"But we don't have any policy tools that would directly influence so-called long-term interest rates."

DEPUTY GOVERNOR HIROHIDE YAMAGUCHI, July 22, Hokkaido, northern Japan:

"The economy is expected to head towards what the BOJ sees as price stability. As such, I don't see the need to take further policy action.

"With regard to future developments in corporate financing, there is uncertainty about whether these signs of improvement will become widespread.

"The Bank will decide whether to terminate, alter or further extend these measures by the end of December ... The bank will, without any predetermined view, carefully assess developments in corporate financing and financial markets, and will decide at the appropriate time whether the support offered by the current measures is still necessary." (Reporting by Leika Kihara; Editing by Michael Watson)