Japan govt picks power firm exec for BOJ board

TOKYO (Reuters) - Japan's government on Friday named Yoshihisa Morimoto, a director at the country's largest electric power company, as a candidate to fill the remaining open spot on the central bank's policy board.

The 65-year-old executive at Tokyo Electric Power Co Inc (TEPCO) (9501.T) will take up the post Kiyohiko Nishimura left when he moved from being a board member to deputy governor, a government document presented to parliament showed.

Morimoto's views on monetary policy were not immediately clear, but his nomination disappointed some analysts who said his lack of experience in financial markets could undermine debate by the board and he would have little impact on monetary policy.

"Morimoto is from the corporate world so the BOJ board would not have a member with a lot of experience in financial markets," said Atsushi Ito, a JGB strategist, Morgan Stanley.

"That would raise concerns that fewer voices from the market would reach the BOJ."

Some market players had expected the government to pick a financially savvy nominee with market skills and experience, such as Atsushi Mizuno, a bond strategist, who finished his five-year term on the BOJ board in December.

The BOJ's nine-member board currently has two vacancies. The one left by Mizuno will be filled by Ryuzo Miyao, a professor at Kobe University, who will take up the post in time to attend the central bank's policy-setting meeting next month.

If approved by parliament, Morimoto, also vice chairman of an electricity industry business lobby, will join the board on July 1 as a third member from the business community.

Other board members include two career central bankers, including Governor Masaaki Shirakawa, three academics and a banking industry veteran who was mainly involved in business planning.

"It is certainly unclear why the government nominated Morimoto as he seems to have nothing to do with monetary policy. The only possible reason is that he is a representative of business circles," said Masamichi Adachi, a senior economist at JPMorgan Securities Japan.

"Assuming Morimoto is not versed in monetary policy, he is unlikely to give opposing views to other BOJ board members. So his influence on BOJ policy should be limited."

Other analysts also said industry representatives on the BOJ board tend to follow the BOJ's standard views on monetary policy due in part to their lack of experience in financial markets.

The government's top spokesman said Morimoto was chosen because of his extensive experience in business.

"I think he's well versed in economic affairs and has a lot of experience and insight," Chief Cabinet Secretary Hirofumi Hirano told a news conference.

But some others said Morimoto's nomination may be intended to increase the influence of Japan's biggest business lobby, Nippon Keidanren, on policy debates at the central bank.

"Electric power demand is a good indicator of economic trends and corporate investments, so the BOJ may want a representative from the electric power industry," an industry source told Reuters.

"TEPCO also has a big presence within Nippon Keidanren, so that might also be another reason for his nomination."

(Additional reporting by Rie Ishiguro, Leika Kihara and James Topham; Editing by Nathan Layne and Joseph Radford)