Japan39;s economy recovering moderately, though with some weakness
BOJ sticks to view underlying inflation to gradually accelerate
Uchida says BOJ39;s bond taper size will be 39;significant39;
BOJ to hold meetings with bond market players July 910

TOKYO, June 21 Reuters Bank of Japan Deputy Governor Shinichi Uchida said on Friday the central bank will adjust the degree of monetary support if the economy and prices move in line with its forecasts, signalling readiness to raise interest rates further.

Japan39;s economy is recovering moderately, although there are some weak signs, Uchida said in a speech at an annual meeting of trust unions. Uchida delivered the speech on behalf of governor Kazuo Ueda.

The deputy governor also said Japan39;s underlying inflation is likely to gradually accelerate towards the BOJ39;s 2 target, as rising wages and prices heighten inflation expectations.

The BOJ ended eight years of negative interest rates in March and has signalled its intention to raise shortterm rates further from the current range of 00.1.

The central bank also decided at last week39;s policy meeting to announce a plan in July on how to trim its huge bond buying in the coming one to two years.

Uchida said the scale of the BOJ39;s bond tapering will be significant, repeating a comment made by governor Ueda in last week39;s postmeeting news conference.

The BOJ said on Friday it will hold a series of meetings with bond market participants on July 910 to collect…