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BOJ's Ishida upbeat on export outlook, warns of structural issues

By Leika Kihara SHIMONOSEKI Japan (Reuters) - Bank of Japan board member Koji Ishida said on Tuesday that export conditions were likely to improve as global growth picks up, but warned domestic structural factors may undermine exports in the long term. Ishida also said wage growth will hold the key to whether household demand will overcome the spending drag of a sales tax hike in April to rebound in July-September - as the BOJ projects. "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. While sticking to the BOJ's official view that improvements in the global economy were set to 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. Overall, Japan's economy would continue improving moderately from an expected contraction in the April-June quarter caused by the tax hike, he said. Ishida reiterated the BOJ's readiness to adjust monetary policy as needed if risks threatened the central bank's upbeat economic and price forecasts. 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. 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. (Reporting by Leika Kihara; Editing by Chris Gallagher and Eric Meijer)