POLL-Japan seen exiting recession next quarter with more BOJ easing
* For poll data see
* Fragile recovery seen underway in early 2013
* BOJ likely to ease in December
* Analysts split on likelihood of more BOJ easing in January
* Analysts expect next government to give budget boost
TOKYO, Dec 14 (Reuters) - Economists have stood by forecasts of Japan making a fragile recovery early next year to exit a shallow recession, with high expectations that an election on Sunday will usher in a new government intent on aggressive monetary easing, a Reuters poll showed on Friday.
Analysts expect the world's third largest economy to grow 0.4 percent in the January-March quarter after shrinking 0.1 percent in the current quarter, according to the median forecast from a poll of 24 economists taken Dec. 10-13.
That consensus forecast is unchanged from last month, though much has changed in Japan since last month's poll.
In mid-November, Prime Minister Yoshihiko Noda gave in to pressures for an early election, which sent the yen tumbling 5.6 percent as markets expect him to lose to a rival who advocates aggressive monetary easing.
Media polls show the opposition Liberal Democratic Party (LDP) was set for a stunning victory in Sunday's election, returning to power with Shinzo Abe, a former prime minister, at the helm.
Abe has vowed to press the Bank of Japan for more powerful monetary stimulus to beat deflation and to weaken a yen currency whose strength has hurt the country's export reliant economy.
For the financial year to March 2013, the latest survey showed the economy was expected to grow 1.0 percent, up from the 0.8 percent expected in the November survey. The economy is then expected to expand by a modest 1.3 percent in the following fiscal year, the poll showed.
A majority of respondents, 14 out of 19, expected the BOJ to ease monetary policy at its next meeting on Dec. 19-20. But they were split on whether the BOJ will ease again in January. Nine said yes, eight said no.
Only a few of the economists surveyed responded to a question on how the BOJ might ease policy. Three said the BOJ might opt to buy longer dated government bonds than it currently buys under its asset purchasing programme.
"Japan remains under deflationary pressure and such pressure won't disappear easily. The BOJ will probably ease in December and possibly again in January with the political pressure as well," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
Looking ahead to how the BOJ might act if the LDP wins the election, as expected, 12 of the 18 analysts who responded to the question saw the central bank falling in line with Abe's proposal for a 2 percent inflation rate goal, double the current BOJ target of 1 percent.
A small minority of respondents were split between options for the BOJ to undertake unlimited easing and scrapping the 0.1 percent interest it pays banks on excess reserves parked with it.
But the central bank is unlikely to cut its benchmark interest rate, the overnight call rate currently set at between 0.0-0.1 percent, to below zero, according to 10 of 18 analysts.
Japan's economy recovered earlier this year from damage caused by last year's devastating earthquake, tsunami and subsequent nuclear crisis on spending for reconstruction.
As that boost tapered off, and the global slowdown hit Japan's export markets harder, the economy suffered a second straight quarterly contraction in July-September, putting Japan in a technical recession.
Analysts believe the recession will prove short-lived, though the recovery is likely to be fragile.
"There are positive signs for the economy such as an improvement in factory output and some recovery in auto sales in November," said Taro Saito, senior economist at NLI Research Institute.
"The main scenario is that the economy will gradually recover early next year but there are risks of a delay in the timing."
A new government is expected to draft fresh budget measures to shore up the economy.
Among 14 economists who answered the question, five said the size of the extra budget stimulus should be 10 trillion yen, four said 2 trillion yen, and one said 2-3 trililon yen. (For poll data click on )
(Additional polling and analysis by Ruby Cherian and Sumanta Dey; Editing by Simon Cameron-Moore)