Policy decision expected 02300430GMT, Friday
BOJ seen keeping interest rate targets unchanged
Board likely to debate factors driving recent rise in yields
No consensus within BOJ on timing of rate hike sources
Gov Ueda expected to hold briefing 0630GMT

TOKYO, Sept 19 Reuters The Bank of Japan will likely keep interest rates ultralow on Friday and reassure markets that monetary stimulus will stay, at least for now, as China39;s economic woes and the global fallout from U.S. interest rates cloud the outlook.

The accommodative policy contrasts with that of the U.S. and European central banks, which have hiked rates to record levels and signalled that borrowing costs will stay high to combat sticky inflation.

With rising raw material costs also keeping Japan39;s inflation above their 2 target for more than a year, BOJ policymakers are increasingly talking up the need to shift away from the massive stimulus of the past decade.

Given uncertainty over the wage outlook, however, there is no consensus within the BOJ on when and in what order the bank ends negative shortterm interest rates and a bond yield cap, say three sources familiar with its thinking.

Many central bank policymakers prefer to hold fire until there is more clarity on whether Japan39;s fragile economy can weather the hit from slowing U.S. and Chinese demand, they say.

Uncertainty over the global outlook is very high, posing a huge risk to Japan39;s economy, one of the sources said.

The outlook for…