* BOJ kept policy unchanged this month
* BOJ Kuroda signals easy policy is here to stay
* Next meeting is April 26-27
* Exports boosting Japan economy but domestic demand weak (Adds details on policy)
By Leika Kihara and Stanley White
TOKYO, March 24 (Reuters) - Bank of Japan Governor Haruhiko Kuroda said on Friday there is “no reason” to withdraw the bank’s massive monetary stimulus now as inflation remains far from its 2 percent target.
Kuroda also dismissed financial market concerns that at some point in the future the BOJ will lose its ability to control long-term interest rates under its yield-curve-control framework.
“While some improvements have been observed in economic and price developments, there is still a long way to go to achieve our price target,” Kuroda said in a speech at a Reuters Newsmaker event.
Kuroda added that the BOJ won’t increase its bond yield target just because overseas long-term interest rates are rising, a scenario some traders believe is inevitable.
The BOJ maintained its short-term interest rate target of minus 0.1 and a pledge to guide the 10-year government bond yield at around zero percent after a policy meeting on March 16.
It also kept intact a loose pledge to maintain the pace of its annual increase in Japanese government bond (JGBs) holdings, which is 80 trillion yen ($718.78 billion).
Japan’s long-stagnant economy has shown signs of life in recent months, with exports and factory output benefiting from a recovery in global demand.
Core consumer prices rose for the first time in over a year in January and analysts expect them to continue to pick up slowly but steadily.
That has led to a dramatic shift in market expectations, with a majority of analysts polled by Reuters predicting the BOJ’s next move would be to start scaling back its ultra-easy policy, likely beginning by raising its bond yield target.
Japan’s domestic demand remains sluggish, however. Household spending fell 1.2 percent in January from a year earlier. ($1 = 111.3000 yen) (Reporting by Leika Kihara and Stanley White; Editing by Chris Gallagher and Kim Coghill)