BOJ policymakers saw need to go slow in future rate hikes

TOKYO (Reuters) -- Many Bank of Japan policymakers saw a need to go slow in phasing out its ultraloose monetary policy, with one board member saying the economy's health did not warrant rapid hikes in interest rates, a summary of opinions at the bank's March meeting showed.

In making last week's historic decision to end negative interest rates, the board was divided on whether the economy was strong enough to weather the exit, the summary showed.

"Even if the BOJ ends negative rate policy, it would need to emphasize its cautious stance, as the economy is not in a state where rapid interest rate hikes are necessary," one member was quoted as saying.

"It is important to clearly communicate ... that the changes in our monetary policy framework proposed at this meeting will not be a regime shift toward monetary tightening, but rather an effort to achieve our price target," another member said.

The BOJ ended eight years of negative interest rates and other remnants of its unorthodox policy last week, making a landmark shift away from its focus on reflating growth with decades of massive monetary stimulus.

The opinions shown in the summary underscore the BOJ's preference to move slowly in future interest rate hikes and could keep the Japanese yen under pressure as investors focus on the still-large gap between U.S. and Japanese interest rates.

At the meeting, some policymakers said recent data, such as bumper wage hikes offered by big firms, justified ending the ultraloose policy, as sustained achievement of the bank's 2% inflation target was in sight, the summary showed on Thursday.

But several board members called for more scrutiny on whether wage gains will spread to smaller firms, and the extent to which expectations of rising