FACTBOX: What happens if Japan fails to pick new BOJ governor
(Reuters) - Japan's upper house of parliament voted down the government's nominee for the next Bank of Japan chief on Wednesday, a veto that means the post is set to be vacant in a few hours.
The vote was expected after executives of the main opposition Democratic Party said on Tuesday they would veto Koji Tanami, the government's second nominee for central bank chief after its first pick, BOJ Deputy Governor Toshiro Muto, was rejected by parliament last week.
While a system is in place to ensure there will be an acting governor when appointments are delayed, analysts doubt if a stand-in would make long-term policy decisions.
Following are key points on how the selection process works and what happens when parliament fails to approve a replacement before a BOJ governor he retires:
-- The government nominees for central bank governor and two deputy governors require approval from both the lower and upper houses of parliament.
-- Opposition parties hold a majority in the upper house and can block appointments.
-- If parliament fails to approve the nominees before the terms of BOJ Governor Toshihiko Fukui and his deputies Muto and Kazumasa Iwata end at midnight (1500 GMT), the positions may become vacant.
-- If the post of governor falls vacant because of death, resignation or parliament's failure to approve a successor by the time the governor's term expires, the job is temporarily taken over by a deputy governor.
-- The departing governor, Fukui, would pick one of the two incoming deputy governors to serve as acting governor.
-- After parliament's rejection of Tanami, career central banker Masaaki Shirakawa, who was approved as a new deputy governor last week, is likely to serve as acting governor until a new BOJ head is picked.
-- The government will also need to pick a new person to replace Kiyohiko Nishimura's old seat on the BOJ board after he was approved as a new deputy governor on Wednesday. This person would also require parliamentary approval.
(Reporting by Yoko Nishikawa; Editing by Hugh Lawson)
