Japan govt may name BOJ nominees this week-sources

TOKYO, Feb 18 (Reuters) - Nominees for the next Bank of Japan governor and the two deputy governors are likely to be put forward as early as this week, government sources said.

The government is considering naming Toshiro Muto, currently a deputy, to take over from Governor Toshihiko Fukui when he retires on March 19 at the end of a five-year term, the sources said.

The Nikkei financial daily reported on Monday that the main opposition Democratic Party of Japan is now leaning towards accepting Muto as governor for fear it could be blamed for a policy vacuum if it continues to reject him.

The nominations need approval from both chambers of parliament, enabling the opposition to block appointments thanks to its control of the upper house.

Many Democratic lawmakers have said Muto is unsuitable to lead the central bank because as a former vice finance minister he is too close to the government.

Senior representatives from ruling coalition and opposition parties are expected to meet late on Monday or Tuesday to hammer out details of parliamentary hearings to question the government's yet-unnamed nominee for the next central bank chief.

The government is expected to put forward its candidates for Bank of Japan governor and two deputy governors soon after parliament agrees on the procedures.

The terms of Muto and his fellow deputy governor Kazumasa Iwata also end on March 19.

Masaaki Shirakawa, a former BOJ assistant governor and now a professor at Kyoto University, is seen as a leading candidate to be one of the deputy governors. (Reporting by Sumio Ito and Hideyuki Sano, Editing by Michael Watson)