Bank of Japan Governor Masaaki Shirakawa said on Thursday a stronger yen would push down prices in the near term but might support the economy in the longer run.

Japan must look at the overall economy in gauging the impact of the yen's strengthening, Shirakawa told a news conference.

The central bank chief added that he would carefully monitor the impact of currency moves on the economy and that currency rates should be formed in a stable manner in the market.

At a two-day policy meeting that ended on Thursday, the BOJ kept interest rates at 0.1 percent and upgraded its assessment of the economy, as improving exports and output heighten the chance the economy will meet its forecast of a moderate pickup early next year. [ID:nnT354152]

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Following are key quotes from Shirakawa's news conference:

To give our general view on the yen, the short-term impact of a stronger yen would be to lower prices. It is possible for a stronger yen to support the economy in the long run.

In the long term, we need to look at the overall balance of the economy to determine the impact of a stronger yen.

We will watch the impact of currency markets. We feel it's important that currency rates are determined in a very stable environment.

Flunctuations in currency rates have various impacts on the economy and financial markets, so we need to watch them carefully.

It is desirable that currrency rates are formed in the markets in a stable manner. (Reporting by Leika Kihara, Tetsushi Kajimoto, Stanley White)