UPDATE 1-Japan's Sengoku urges BOJ to help boost capex

* Sengoku adds pressure for BOJ action

* BOJ leans towards easing policy at 2-day rate review (Adds quotes, background)

TOKYO, March 16 (Reuters) - Japanese National Strategy Minister Yoshito Sengoku said on Tuesday he wants the Bank of Japan to help boost the economy through monetary policy, keeping up pressure on the central bank ahead of its rate review.

"We would like the BOJ to steer monetary policy to help boost production, corporate capital spending and personal consumption and help energise the nation," he told a news conference after a cabinet meeting.

"The BOJ's monetary policy has a major impact on people's mindset," Sengoku said. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For more stories on the Japanese economy click [ID:nECONJP]) ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The BOJ, which will end a two-day board meeting on Wednesday, is leaning towards easing monetary policy again under pressure from government calls for action to beat deflation, but the board is split on how to justify the move, sources familiar with the central bank's thinking say. [ID:nTOE62E0AS]

Finance Minister Naoto Kan has ratcheted up pressure on the BOJ by saying he wants deflation to end this year and that inflation of 1 percent is desirable.

The government has been prodding the BOJ to loosen monetary policy even as it upgraded its view on the economy, because it wants to stem a strengthening of the yen that some fear could derail the export-driven economic recovery, analysts said. [ID:nTOE62E08Z]

Sengoku has less influence on monetary policy than Kan, who can send a representative to sit in on BOJ policy meetings.

The BOJ, which sees deflation lasting a few more years, is leaning towards expanding or extending a funding operation it put in place at an emergency meeting in December, sources have told Reuters. (Reporting by Yuko Yoshikawa; Writing by Rie Ishiguro; Editing by Michael Watson)