Japan deadlock threatens selection of new BOJ chief

By Chisa Fujioka

TOKYO, March 3 (Reuters) - A political deadlock threatened the government's top pick for a new Japanese central bank chief, as a poll showed that doubts about beleaguered Prime Minister Yasuo Fukuda's leadership had further eroded his popularity.

Angered by the ruling bloc's move to ram next year's budget and tax measures through the lower house on Friday, opposition parties have signalled they would reject Bank of Japan Deputy Governor Toshiro Muto if the government proposes him to take over from Governor Toshihiko Fukui, who retires on March 19.

Former BOJ Deputy Governor Yutaka Yamaguchi, seen as slightly more hawkish on interest rates and lacking Muto's skills at political manoeuvring, has been floated as an alternative.

Fukuda's popularity has been sliding since he took office in September, and a Mainichi newspaper poll showed on Monday that 51 percent of respondents did not back his cabinet.

Just 30 percent supported the prime minister, the poll showed.

The newspaper attributed the decline to Fukuda's handling of the inquiry into a collision between a naval destroyer and a fishing boat last month, an incident that has led to calls from opposition parties for his defence chief to resign.

The Mainichi poll showed 49 percent of respondents wanted Defence Minister Shigeru Ishiba to quit amid accusations of a cover-up over the events leading to the collision.

Ishiba has denied trying to hide information and Fukuda has said the minister should stay on.