UPDATE 3-Kuroda reappointment at BOJ seen as sign stimulus policy will go on

* Approval of parliament is near-certain

* Reappointment will reassure jittery investors

* PM Abe has expressed "full trust" in Kuroda (Adds analyst quote, detail)

TOKYO, Feb 9 (Reuters) - Japan's government has decided to nominate Haruhiko Kuroda to serve as governor of the central bank for another term when his current one expires in April, according to media reports, a sign the country's ultra-loose monetary policy will remain in place.

The reappointment would heighten the chances the BOJ will stick to its policy of capping borrowing costs around zero, offering some relief to investors jittery about signs that some major central banks may dial back their crisis-mode policies earlier than expected.

The nomination needs approval by both houses of parliament, a near certainty as premier Shinzo Abe's ruling coalition holds comfortable majorities in the lower and upper houses of the Diet.

"All in all it is a good sign," said Stefan Gerlach, chief economist at Swiss bank EFG and former Deputy Governor of the Central Bank of Ireland.

"It means there is policy continuity and obviously it is good to have someone who is respected by the government enough to be reappointed."

Japan's Kyodo news agency reported on Friday Abe would likely reappoint Kuroda for a rare second term, a choice widely expected by markets.

The Nikkei economic daily said the government would present the nomination to parliament this month, citing government sources familiar with the matter.

Kuroda and his two deputies, former academic Kikuo Iwata and career central banker Hiroshi Nakaso, will see their five-year terms end in April and March respectively.

With job losses at historic lows and corporate profits booming, Abe has repeatedly said he has "full trust" in the governor's handling of monetary policy.

Kuroda has stressed his resolve to keep the monetary spigot wide open to achieve his elusive inflation target, a sign the BOJ will maintain its massive stimulus programme even as other central banks move towards ending crisis-mode stimulus.

"A positive economic cycle is kicking off. I hope the BOJ continues to promote bold monetary easing to achieve its 2 percent inflation target," Abe told parliament on Monday.

The dollar rose against the yen on expectations that Kuroda's reappointment increases the chances the BOJ will maintain its massive stimulus programme.

Analysts have said, however, that a reappointment will diminish the chance of the BOJ deploying more radical stimulus measures, such as direct BOJ bank-rolling of government debt as advocated by other candidates for the job, including Abe's former aide Etsuro Honda.

"There are still big questions as to where policy goes and remember Kuroda has surprised markets in the past. But for now the reappointment suggests policy continuity throughout the year," said Chris Scicluna, head of economic research at Daiwa Capital Markets in London.

Kuroda was hand-picked by Abe to take the BOJ's helm in 2013 to deploy one of the "three arrows" of his stimulus policies - aggressive monetary easing to reflate the economy out of grinding deflation.

But three years of aggressive asset purchases under a policy dubbed "quantitative and qualitative easing" (QQE) failed to accelerate inflation to the 2 percent target.

That forced the BOJ to revert to a policy targeting interest rates, a shift many analysts saw as a retreat from its radical monetary experiment towards a future withdrawal of crisis-mode stimulus. (Additional reporting by Dhara Ranasinghe and Marc Johns in London; Editing by Andrew Roche)