TOKYO - Bank of Japan Governor Masaaki Shirakawa said on Tuesday monetary policy should not be directly linked to short-term market moves, stressing that the focus should be on the outlook for the economy and prices.

He also told a news conference it was inappropriate to have any preset idea now on whether the BOJ would ease policy at its next rate review on April 27.

As widely expected, the BOJ kept monetary policy steady in a two-day meeting that ended on Tuesday, holding off on easing until a more thorough assessment of the economy later this month which may give clues on whether more action is needed to boost the sluggish economy.

Following are key quotes from Shirakawa's news conference:

Policy and Market moves

"We have expanded the asset buying and lending scheme four times since setting it up in 2010. The yen weakened and share prices rose in some cases in reaction but not in other cases.

There is no set pattern.

"We have concluded that by trying to influence interest rates, that would impact the overall economy.

"If we manage policy solely by looking at short-term market moves, that would bar our policy from achieving the long-term stability of the economy.

"Our focus is the outlook for prices and the economy when managing policy."

Next Rate Review

"We carefully examined the economy and prices at today's policy meeting. We will examine them particularly closely at our next rate review and make appropriate monetary policy decisions based on our assessment...

"Discussions on monetary policy at a polity meeting should be judged in accordance with data regarding the economy, prices and financial conditions at the time.

"As this stage I should refrain from having predetermined mind on a decision to be made at the next policy meeting."

Economy

"The tail risk of Europe's debt problems causing massive harm has subsided... The probability of Japan's economy resuming a gradual recovery has increased due to that reduced tail risk."