HIGHLIGHTS-BOJ Governor Kuroda's comments at news conference

TOKYO, Jan 23 (Reuters) - Japan's central bank kept monetary settings unchanged on Tuesday and offered a more upbeat view on inflation expectations than three months ago, signaling its conviction a strengthening recovery will gradually push price growth to its 2 percent target. Following are comments from BOJ Governor Haruhiko Kuroda at his post-meeting news conference: INFLATION AND MONETARY POLICY "Japan's economy is expanding moderately but inflation remains weak. Other countries are facing similar situations but unlike these countries, many of whom are seeing inflation move around 1.5 percent, inflation excluding energy costs is barely above zero percent in Japan.

"There is still some distance to 2 percent inflation, so we're in no condition yet to debate the timing of an exit from ultra-easy monetary policy.

INFLATION EXPECTATIONS "There is absolutely no need to adjust our yield targets just because we revised up our assessment on inflation expectations." (On the BOJ's decision to revise up its assessment of inflation expectations)

BUYING EXCHANGE-TRADED FUNDS "For Japan's economy, it's important for the BOJ to patiently continue with powerful monetary easing. (When asked whether the BOJ could slow its purchases of exchange-traded funds. (ETF) "Our ETF buying is one aspect of our monetary policy framework, and has had a positive impact on the economy and prices by pushing down risk premiums. The purchases have played a big role. "So far, we're not seeing any signs investors are becoming excessively bullish on stock prices. There is also no big problem in terms of corporate governance. There is no need to review our ETF purchases now. "As for the future, we will decide appropriately looking at the economy, prices and financial developments from the viewpoint of achieving 2 percent inflation at the earliest date possible." CUTS IN BOJ BOND BUYING "Some in the market say the cut in the BOJ's bond buying in market operations triggered the yen rise. (On the BOJ's cut in bond buying at its recent market operations and how it pushed up the yen) "But when you look at the overall currency market, you can see that the euro rose sharply against the dollar. The dollar has been weakening against other currencies. As such, we can't necessarily say it was a yen rise.

"We of course are watching currency moves carefully. But our market operation is conducted to guide the yield curve to an appropriate shape, so the pace of buying could fluctuate ... I don't think our market operations will become difficult (just because the recent cut in bond buying led to a yen rise).

"The amount and timing of the BOJ's bond buying operations does not have any implications on monetary policy."


(Asked about some board members' view that the BOJ should debate slowing ETF buying or raising yield targets in future)

"That is only a minority view. I myself feel that the BOJ should continue buying ETFs at the current pace and maintain currrent yield target levels, to sustain ultra-loose monetary conditions."


(Asked whether government pressure to keep borrowing costs low prevents the BOJ from withdrawing stimulus)

"The BOJ is conducting policy to achieve price and financial system stability. The BOJ is also independent from the government and makes decisions as a board. As such, there is no need to worry about such a risk." APPOINTMENT OF A NEW BOJ GOVERNOR

"With the global market so interwined, it's very important for any central bank governor to have a global perspective.

"Policymaking also involves choosing among various theoretical options, so you need both practical knowledge and the ability to analyze theories.

"That's not to say I have all these skills. But in general, I do feel these are the qualifications needed for modern-day central bank governors."

(Reporting by Leika Kihara; Editing by Eric Meijer)