* Ishida says BOJ already buying JGBs open-endedly
* Adds scrapping bank note rule needs policy overhaul
* Also cautious of scrapping 0.1 pct rate floor soon
By Leika Kihara
UTSUNOMIYA, Japan, March 11 (Reuters) - Bank of Japan board member Koji Ishida voiced caution against taking unorthodox options too hastily, saying that buying longer-dated bonds or scrapping a cap on the bank's bond holdings would warrant a major overhaul of its policy framework.
The former commercial banker also said the BOJ was already effectively buying assets in an open-ended manner as it aims to pump more money into the economy via an asset-buying and lending programme, shrugging off the need to tweak the way it buys assets now.
Asian Development Bank President Haruhiko Kuroda, the government's nominee for next BOJ governor, has called for more aggressive monetary stimulus to beat deflation.
In parliament hearings, he has said the central bank should consider buying longer-dated bonds and scrap a self-imposed rule of capping its bond holdings to size of bank notes in circulation.
But Ishida said such steps should be considered only after a thorough review of the BOJ's monetary policy framework and its policy objectives.
"The asset-buying programme is the backbone of the BOJ's current monetary easing structure," Ishida said in a news conference after meeting business leaders in Utsunomiya, about 100 km (62 miles) north of Tokyo, on Monday.
"Changing this would be a big shift in its policy framework and would require a comprehensive examination of the purpose, means, costs and effects as well as the transmission channel of monetary policy," he said.
The BOJ's asset-buying and lending programme now serves as its key tool for monetary easing. It has pledged to pump 101 trillion yen to markets by the end of this year and shift to open-ended asset purchases from next year.
The BOJ only targets bonds with up to three years until maturity in the asset-buying programme, but Kuroda has signalled buying longer-dated bonds as an option in easing policy.
Kuroda also suggested front-loading the timing of open-ended asset purchases. BOJ board member Sayuri Shirai made such a proposal last week, although it was turned down by a 1-8 vote.
Many investors expect the central bank to ponder fresh action at its next meeting on April 3-4, when Kuroda and his two deputies are expected to join the board.
The BOJ's board has already been considering various future options ahead of the leadership change. Ishida himself proposed in December scrapping a 0.1 percent interest paid to excess reserves financial institutions park with the BOJ.
While the proposal was turned down by a 1-8 vote, several other board members have since then suggested that it would be a future option to nudge down already low money market rates on hope of indirectly weakening the yen.
Ishida said he decided not to repeat the proposal because the December vote showed there was little support for it for now. He said he would consider it an option again only as part of an overhaul of the BOJ's policy framework.