Japan to nominate Shirakawa as permanent BOJ chief

(For more on the BOJ succession, click [ID:nT55777])

By Yoko Nishikawa

TOKYO, April 7 (Reuters) - The Japanese government is likely to nominate acting BOJ Governor Masaaki Shirakawa on Monday to take the helm of the central bank permanently, after the main opposition party signalled support for the idea.

But opposition from Ichiro Ozawa, the leader of the main opposition Democratic Party, to a government plan to nominate a former finance ministry bureaucrat for deputy governor has prompted speculation that Prime Minister Yasuo Fukuda may postpone the submission of one or both nominees.

A political deadlock due to opposition control of the upper house of parliament has led to the first vacancy at the top of the Bank of Japan (BOJ) in 80 years after former governor Toshihiko Fukui retired almost three weeks ago.

That gap in the midst of a global credit crisis has embarrassed the government, which wants the vacancy filled in time for a permanent governor to fly to Washington for a G7 meeting on Friday that will focus on gyrating global markets and concern about a U.S. recession.

Opposition parties, which can veto nominees to head the central bank in the upper house, have rejected the government's two previous nominees on grounds that their careers in the finance ministry would threaten the BOJ's independence in monetary policy.

The showdown reflected the broader political impasse that is undermining confidence in Fukuda, who is already suffering public doubts about his leadership that have cut his support rates to 24 percent, a public poll by the Mainichi newspaper showed.

The government plans to submit its nominee for the BOJ chief to a parliamentary committee from 12:40 p.m. (0340 GMT). If it does, the parliament is expected to hold hearings on the nominees before a parliamentary vote on Wednesday.