UPDATE 2-Japan seeks G20 response to market rout, Kuroda defends negative rates

* Negative rates will help stimulate economy-Kuroda

* Kuroda meets PM Abe, discusses global markets

* Kuroda declines to comment on FX rates (Adds meeting with PM Abe, comments from MOF official)

TOKYO, Feb 12 (Reuters) - Japanese policymakers on Friday said they would seek a global policy response from G20 nations to world market turbulence, as the country’s central bank governor dismissed suggestions the rout was caused by the bank’s new negative interest rate policy.

Underscoring Tokyo’s alarm over the relentless drop in stock prices, Prime Minister Shinzo Abe held talks with Kuroda for the first time in nearly five months to discuss global economic and market developments.

“I explained the BOJ’s thinking on quantitative and qualitative easing with negative interest rates and its effects,” Kuroda told reporters after the meeting, adding that Abe made no particular remarks on monetary policy.

Kuroda declined to comment on recent yen moves and what he discussed with Abe on currency policy.

Japan’s Nikkei share average fell more than 5 pct to a fresh 16-month low on Friday, while the yen remained near a 15-month high against the dollar as investors flocked to the safety of the Japanese currency on concerns about the health of European banks and the global economic outlook.

Verbal threats of intervention by Finance Minister Taro Aso failed to knock the yen lower. Yen strength has added to headaches for the BOJ, whose adoption of negative interest rates last month has so far failed to produce a sustained positive stock market impact amid a wider market rout.

Aso and his subordinates at the Finance Ministry said they will look to see whether G20 finance leaders can agree on policy coordination when they meet in Shanghai later this month.

“There are a lot of deep-rooted problems behind recent market moves. Naturally, we have to look at ways we can promote policy coordination heading into the G20 meeting,” top currency diplomat Masatsugu Asakawa told reporters on Friday.

Earlier, Kuroda said the BOJ’s negative rate policy will help stimulate the economy by lowering borrowing costs, dismissing criticism that the policy move has aggravated the market turmoil by stoking fears it will further squeeze bank profits.

“I don’t think the BOJ’s negative rate policy is behind (the recent market turbulence),” Kuroda told parliament on Friday.

“Excessive risk aversion is spreading among global investors,” he said, adding that he will carefully watch how recent market moves could affect Japan’s economy and prices.

He also reiterated that the BOJ would not hesitate to expand monetary stimulus further if needed to achieve its 2 percent inflation target.

The BOJ cut the benchmark interest rate to below zero last month, stunning investors with another bold move to stimulate the economy as volatile markets and slowing global growth threaten its efforts to overcome deflation. (Additional reporting by Stanley White; Editing by Chris Gallagher and Sam Holmes)