UPDATE 1-BOJ mulled buying more risk assets at Sept meeting-minutes

* BOJ board agreed recovery delayed "considerably" - minutes

* Sept minutes showed BOJ concern over weak price trend

* One member suggested buying more risk assets

* Another member said must mull ways to influence FX

(Adds quotes, details) By Leika Kihara

TOKYO, Oct 11 (Reuters) - Signs of considerable delay inJapan's economic recovery and weakening prices drove Bank ofJapan policymakers into expanding monetary stimulus last monthwith some suggesting buying more risk assets or seeking ways toinfluence currency moves, minutes of the meeting showed.

Some in the nine-member board worried that yen strengtheningand falls in share prices could hurt capital spending andprivate consumption - which had so far been resilient and offsetsome of the pain from weakening exports - a sign the centralbank may be hardly done acting even after loosening policy inSeptember.

"Members agreed that the economy will resume a moderaterecovery at some point, but that the timing might be delayedconsiderably from the BOJ's forecast made in April," accordingto the minutes of the September meeting released on Thursday.

The BOJ last month eased policy by boosting its asset-buyingprogramme, under which it targets government bonds, corporatedebt and risk assets such as funds investing in shares andproperty, by 10 trillion yen ($128 billion) to 80 trillion yen.

The decision was made by a unanimous vote with all of theincrease set aside for purchases of government bonds andTreasury discount bills. This is now the BOJ's most conventionalway of easing policy because buying these assets is safer thantargeting risk assets, which could potentially lead to lossesand hurt the bank's capital base.

But in a sign that some members wanted bolder steps, onepolicymaker suggested increasing not just government bond buyingbut purchases of risk assets, arguing that doing so would helpmaximize the effect of monetary easing, the minutes showed.

Another member also said the central bank should considernew ways to influence currency moves by heightening inflationexpectations in the market.

The remarks suggest that such measures might be consideredas options when the BOJ next eases monetary policy.

Having eased in September, the BOJ resisted politicalpressure for action and kept monetary policy on hold at a ratereview last week despite more signs of pain from slowing demandin China and Europe's debt crisis.

The BOJ may ease again, however, at the next policy meetingon Oct. 30, when it is set to cut its long-term economicforecasts and admit that it will take several more years forJapan to achieve the bank's 1 percent inflation target, analystsand sources familiar with its thinking say.

A few board members warned in September that the trend ofprices was weakening and if economic growth continuing to stallfor the time being, consumer prices might rise at a slower pacethan initially expected, the minutes showed.

($1 = 78.3200 Japanese yen)

(Editing by Chris Gallagher and Eric Meijer)


Messaging: leika.kihara.reuters.com@reuters.net))


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