QUOTES-Markets' reaction to BOJ holding policy steady

Sept 22 (Reuters) - The Bank of Japan maintained ultra-low interest rates on Friday and a pledge to keep supporting the economy until inflation sustainably hits its 2% target.

The Japanese yen fell after the decision to around 148 per dollar, government bond futures rallied slightly and stocks pared losses.

Here are market analysts' comments on the news:

HIROFUMI SUZUKI, CHIEF FX STRATEGIST, SUMITOMO MITSUI BANKING CORPORATION, TOKYO:

"What is of interest is how the BOJ views the ongoing depreciation of the yen in the foreign exchange market.

"Of course, there is no way that the BOJ will respond to a weakening yen by raising interest rates or other monetary policy measures, but it will be interesting to see how much caution the BOJ takes with regard to the current financial markets."

JOEL KRUGER, CURRENCY STRATEGIST, LMAX GROUP, LONDON:

"Anyone positioning for something new from the BOJ today, in the form of a less accommodative slant towards monetary policy, has been sorely let down.

"The yen is right back under pressure. This sets the stage for additional yen declines in the days and weeks ahead, with the focus on a dollar/yen retest of the 2022 high just shy of 152.00."

JOHN VAIL, CHIEF GLOBAL STRATEGIST, NIKKO ASSET MANAGEMENT, TOKYO:

"No surprise from my end, but clearly some hawkish market participants were disappointed, as the yen weakened a bit.

"The BOJ, like nearly all OECD central banks as of today, seem to be in a 'wait and see' mode with a mild hawkish bias."

KYLE RODDA, SENIOR ANALYST, CAPITAL.COM, MELBOURNE

"Old habits die hard for the BOJ - and perhaps you can’t blame it. The institution spent decades trying to generate inflation and now that it has, it doesn’t want to move too quickly and squander its achievement.

"Rightly or wrongly, the Bank of Japan is focused on the expectations channel to gauge whether it has successfully re-anchored expectations – they are above 2%, but not meaningfully.

"If the Yen keeps weakening, the silver lining is likely to be a higher Nikkei."

RAY ATTRILL, HEAD OF FX STRATEGY, NATIONAL AUSTRALIA BANK, SYDNEY:

"They've included reference to the foreign exchange in the statement for the first time I can remember.

"It just puts markets further on notice that it's not a green light to be buying dollar/yen with impunity."

MOH SIONG SIM, CURRENCY STRATEGIST, BANK OF SINGAPORE, SINGAPORE:

"(The BOJ) added a line to say that it is watching the FX movements, so I think the FX weakness is becoming a priority ... and that's also moving up on what the BOJ is paying attention to.

"I would expect that in turn to help to limit the yen weakness for now, plus the fact that we're getting a lot of jawboning from Ministry of Finance officials."

CHANG WEI LIANG, FX AND CREDIT STRATEGIST, DBS GROUP RESEARCH, SINGAPORE:

"We expect dollar/yen to move back towards the 148-150 range, restrained by reduced risk appetite and concerns of intervention."

RYUTARO KIMURA, FIXED INCOME STRATEGIST, AXA INVESTMENT MANAGERS, TOKYO

"The BOJ's decision to maintain the status quo was a bit surprising because considering the growing public dissatisfaction with yen depreciation as one of the factors driving inflation, some minor policy adjustments aimed at curbing yen depreciation, like a less dovish forward guidance modification, was considered to be unavoidable."

JAMES KNIVETON, SENIOR CORPORATE FOREX DEALER, CONVERA, MELBOURNE:

"This decision comes in the face of inflation levels that have climbed above the bank's 2% target, as this morning's figures have revealed.

"Before today's announcement, there was a buzz of speculation that we might witness some changes in the central bank's forward guidance. However, these anticipations have been quelled." (Reporting by Brigid Riley and Kevin Buckland in Tokyo, Rae Wee and Tom Westbrook in Singapore and Divya Chowdhury in Mumbai. Editing by Sam Holmes)