TOKYO Feb 15 Japanese Prime Minister Shinzo Abe
is close to selecting his nominee for governor of the Bank of
Japan and a decision could come in the next few days, sources
close to the process told Reuters.
They said Toshiro Muto, a former finance ministry
bureaucrat, is the leading candidate for the top job after the
field of potential candidates was honed down.
The sources declined to be identified because the decision
is still pending and discussions remain private.
Muto, 69, has long been considered a leading candidate to
replace Masaaki Shirakawa, 63, who steps down with his two
deputies on March 19. Muto has experience steering fiscal and
monetary policies and has close ties with ruling party
Abe and his advisers have limited the field of final
candidates to two or three but have decided to exclude academic
and private-sector economists in favour of those like Muto with
That choice would suggest that while the BOJ will continue
to ease monetary policy to beat deflation, it may not pursue
some of the more radical measures that risked heightening
tensions with Japan's Group of 20 counterparts who have said
monetary policy should not target competitive currency
Abe has said he wants to choose a new BOJ governor who
shares his views that the central bank should pursue bolder
stimulus measures to end nearly two decades of deflation.
The nomination needs approval by both houses of parliament
to take effect. Abe's ruling Liberal Democratic Party (LDP)
lacks a majority in the upper house so needs the cooperation of
opposition parties, some of which have opposed having a former
finance bureaucrat at the BOJ's helm.
Currently chairman of private think-tank Daiwa Institute of
Research, Muto rose through the ranks of the powerful Ministry
of Finance to serve as its top bureaucrat before serving as
deputy BOJ governor from 2003 to 2008.
He was nominated by the LDP in 2008 to lead the BOJ, but his
candidacy was struck down in parliament because of opposition by
the Democratic Party.