By Leika Kihara

TOKYO Bank of Japan Governor Kazuo Ueda said on Wednesday volatile currency moves were among the side effects the central bank was scrutinising in maintaining its bond yield control policy, in the wake of the yen's renewed declines against the dollar.

"It's desirable for currency rates to move stably reflecting fundamentals," Ueda told parliament.

"If yield curve control heightens market volatility, that is seen as among side-effects of the policy," Ueda said, when asked by an opposition lawmaker whether he saw sharp yen falls as a side effect of the BOJ's ultra-loose monetary policy.

After a brief reprieve last week, the yen renewed its slide below 150 per dollar, which traders see as a level that heightens the chance of currency intervention by Japanese authorities. It stood at 150.51 against the dollar on Wednesday.

The BOJ's current yield curve control policy, which guides the 10-year government bond yield around 0%, has come under criticism by some lawmakers for widening the U.S.-Japan interest rate gap and causing yen falls that push up import costs.

"We are well aware that underlying price rises are burdening households and companies. But we don't expect such (cost-push pressures) to last very long," Ueda said.

"When looking at trend inflation, there's still some distance towards our 2% target. That is why we are continuing with massive monetary easing," Ueda added, stressing the BOJ's resolve to keep monetary policy ultra-loose for now.

(Reporting by Leika Kihara; Editing by Tom Hogue and Lincoln Feast)