UPDATE 2-BOJ's Ishida cautions on export outlook, warns of structural issues
* Ishida warns of uncertainty over weak yen effect on exports
* Wage growth holds key to consumption outlook-Ishida
* Core CPI only among various factors BOJ looks at-Ishida
* Adds firms being able to translate costs to consumers (Adds quotes from news conference)
By Leika Kihara
SHIMONOSEKI, Japan, July 29 (Reuters) - Bank of Japan board member Koji Ishida warned on Tuesday that domestic structural factors may further delay a much hoped-for rebound in export performance - even as global growth picks up.
He also made the case for a more flexible view of the BOJ's 2 percent price goal - one that is not rigidly pegged to the core consumer price index - suggesting the central bank won't automatically expand stimulus simply because the index fails to hit the target within a given timeframe.
"Exports continue to move sideways and lack momentum" as demand in emerging Asian markets remained weak, Ishida said in a speech to business leaders in Shimonoseki, western Japan, on Tuesday.
While sticking to the BOJ's official view that improvements in the global economy would support exports ahead, Ishida warned that overseas shipments may not grow much because many Japanese companies had shifted factories abroad.
"It's also uncertain how much the (yen's) decline will lead to an expansion in export volume," he noted.
Exports have failed to pick up despite the boost from a weak yen, which gives Japanese goods a competitive advantage overseas - to the disappointment of many BOJ policymakers.
The BOJ has argued that domestic demand is now strong enough to keep the economy on a recovery track. But Ishida's comments underscore a growing concern among central bankers that any rebound in exports will be slow and moderate, keeping the economic recovery fragile.
NOT JUST CORE CPI
The BOJ has stood pat since launching a major monetary stimulus campaign in April last year, when it pledged to double base money via aggressive asset purchases to accelerate consumer inflation to 2 percent in roughly two years.
Core consumer inflation has risen steadily, although it slowed to 1.3 percent in the year to June from 1.4 percent in May, as energy costs moderated from last year's sharp increases.
The BOJ expects consumer inflation to slow in coming months as the boost from a weak yen fades, before accelerating again toward its 2 percent inflation target late this year.
But many analysts doubt whether price rises will accelerate from here, with some predicting the central bank may be forced to ease again if core consumer inflation fails to hit 2 percent early next year.
In an attempt to dispel such speculation, Ishida said the core consumer inflation figures were among a variety of indicators the central bank would examine in judging whether its price target has been met.
"We have to scrutinise various elements of the economy," he said. "Economic data fluctuates every month, so it's hard to set a single standard in judging whether our target is met in a stable manner. It's really a judgement call."
Ishida offered an upbeat take on prices, saying that improvements in the economy are allowing more firms to pass on rising costs to consumers.
"Companies are gradually turning bolder in passing on the costs," Ishida told a news conference. "Wholesale costs continue to rise so if things stay as they are, companies' pricing activity will continue to change. But for this to happen, the economy must remain in good shape."
(Reporting by Leika Kihara; Editing by Chris Gallagher and Eric Meijer)
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