TOKYO (Thomson Financial) - The Japanese government will today issue
proposals to the ruling and opposition parties aimed at averting a leadership
vacuum at the Bank of Japan (BoJ), but it appears unlikely that BoJ deputy
governor Toshiro Muto will be nominated again for the bank's top post, the
Nikkei reported on Monday, citing an unidentified official at the main
opposition Democratic Party of Japan (DPJ).
The DPJ received notification from the ruling Liberal Democratic Party on
Sunday that Prime Minister Yasuo Fukuda had given up on pushing Muto's
candidacy, the business daily said.
Until now, Fukuda has emphasized that Muto, whose nomination was rejected by
the opposition-controlled upper house last week, was the best choice to head the
central bank.
The government is likely to negotiate with the DPJ before naming a candidate
who will be acceptable to both sides.
But if the government determines that such an agreement is not be feasible,
it may refrain from submitting any nominees, the report said.
The government may instead pursue other measures, such as revising the BoJ
Law to enable current central bank governor Toshihiko Fukui, whose term is due
to expire Wednesday, to stay on until a replacement is appointed.
(1 US dollar = 99.09 yen)
yasuhiko.seki@thomson.com
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