Highlights-BOJ minutes: Focus more on econ downside risks

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TOKYO, July 18 (Reuters) - Some Bank of Japan board members said more emphasis should be placed on downside risks to the Japanese economy than upside risks to prices, as wage growth remains sluggish, minutes of the bank's June 12-13 meeting showed on Friday.

The BOJ's board, which currently has only seven members instead of the usual nine, voted unanimously to keep interest rates on hold at the meeting. It held rates steady at its subsequent meeting earlier this week.

The board members also agreed in June that downside risks to the global economy remained high due to shaky financial markets and a stagnating U.S. economy.

Following are key points from the minutes of the meeting:

MONETARY POLICY

-- Members shared the view that developments in prices should be watched more closely, including consumers' expectations about inflation and companies' price-setting behaviour.

-- Some said the BOJ should focus more on downside risks to economic growth than on upside risks to inflation given the situation in Japan which differs from some economies facing vigorous demand and strong upward pressure on wages.

-- One member said the BOJ should take a gradual and pre-emptive approach to forestall an increase in inflation expectations once it becomes confident to some degree that Japan's economy is on a sustainable growth path with price stability.

PRICES

-- A few members said wages were not rising much in Japan and there has been no sign of knock-on inflationary effects from the rise in prices of oil and food products.

-- One member said inflationary pressure from the demand side was not strong, with price hikes limited to items such as energy and food products.

GLOBAL ECONOMY

-- One member said the rise in energy and materials prices was caused by demand, particularly from emerging economies, and global inflation pressure would further rise unless these economies took appropriate policy steps.

-- Members agreed that overseas economies continued to expand as a whole but downside risks remained high due mainly to disruptions in global financial markets and sluggish U.S. growth.

-- One member said the key (to stability in global financial markets) is how U.S. and European financial institutions carry out capital reinforcement measures.

-- Some members said money markets remained strained despite measures by central banks to boost the provision of liquidity. (Reporting by Tetsushi Kajimoto; Editing by Edwina Gibbs)