EXCERPTS-BOJ Governor Kuroda's comments at news conference

Jan 21 (Reuters) - The Bank of Japan kept monetary policy steady on Thursday and revised up its economic forecast for the next fiscal year, signalling that it has delivered sufficient stimulus for now to cushion the blow from the COVID-19 pandemic.

Following are excerpts from BOJ Governor Haruhiko Kuroda's comments at his post-meeting news conference, which was conducted in Japanese, as translated by Reuters:

MARCH POLICY REVIEW

"In the March policy review, we will examine how our massive stimulus programme has affected financial and economic conditions, taking into view the outcome of our comprehensive assessment conducted four years ago. We will also examine the side-effects such as financial intermediation. Such side-effects will accumulate as our easy-policy is prolonged and expected to last longer."

SUSTAINABLE FRAMEWORK

"In conducting the review, we will seek how best to balance the need to curb the side-effects of yield curve control (YCC) while making it more effective ... We also need to make our framework sustainable and be able to respond flexibly as needed. Our review isn't focused just on addressing the side-effects of our policy. We need to make it more effective and agile. If there is anything we can do to more effectively achieve our price target, we will put them into place. We are in the process of conducting our review so we can't say what specific steps we will take."

LONG-TERM INTEREST RATES

"YCC is working properly so we don't see the need to change this framework. But we will look at whether there is room to make it more effective and sustainable. There's no change to our stance that excessive falls in super-long yields hurt pension and insurers. We also believe it's necessary to keep the entire yield curve stably low as COVID-19 hits the economy."

RISK OF RETURN TO DEFLATION

"It's true the output gap is worsening sharply at present. But I don't think it will have a huge immediate negative impact on medium- and long-term inflation expectations. I don't think the risk of Japan sliding back into deflation is high. But potential growth may be falling so we need to look at the impact (on prices) carefully."

EXCHANGE-TRADED FUNDS

(When asked whether BOJ could examine tweaking purchases of exchange-traded funds (ETF) or allow yields to move wider around its long-term yield target) "I can't pre-commit to any steps we can take as this is something we will discuss in March. We will look into these points because we've said we will examine the operations of YCC. But I can't say now what could result from our review."

ASSISTING GOVT ON GROWTH STRATEGY

"(On whether the BOJ could consider steps to assist the government's growth strategy in the March review) "We don't directly tie our policy with that of the government. But we did take steps to ease funding strains, which was linked to the government's lending programme. But we don't have anything specific in mind at the moment."

BOND YIELD TARGET

(On market speculation that the BOJ may widen the range under which 10-year bond yields move around its 0% target) "I don't have anything to say ... We haven't decided what to do at this point. There will be various discussions at the March review."

EXIT FROM MONETARY EASING STEPS

"It's too early to exit from our massive monetary easing programme at this point. Western economies have been deploying monetary easing steps for a decade, and none of them are mulling an exit now."

(Reporting by Leika Kihara; Editing by Rashmi Aich)