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Japan PM Says No Plan for New BOJ Chief Candidate

Japanese Prime Minister Yasuo Fukuda on Monday said the government had no plans to put forward a different candidate for the next central bank chief, despite resistance from opposition parties towards current nominee Toshiro Muto.

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With less than 10 days left before current Governor Toshihiko Fukui retires, key members of the opposition parties, which have the power to block the nomination of a new Bank of Japan chief in parliament, are still against Muto, current deputy governor.

Some opposition lawmakers say that appointing Muto, previously a vice finance minister, which is a top bureaucratic position, would undermine the central bank's independence as such a person would be too close to the government.

"I have no plan to submit new candidates. I put forward what I thought would be the best candidates," Fukuda told reporters.

Fukuda reiterated he would meet with Ichiro Ozawa, the leader of the main opposition Democratic Party, on the BOJ succession issue if needed.

"That all depends on the situation," he added.

The Democrats, along with smaller opposition parties, control the upper house of parliament. Both houses need to approve the appointment of a BOJ governor and deputy governors, so the opposition can block Muto's nomination.

A political wrangle over the nomination has dented the government's credibility and raised concern about a policy vacuum -- at a time of global market turmoil and fears of a recession in Japan -- once Fukui retires on March 19.

Democratic Party Secretary General Yukio Hatoyama was quoted by media as saying on Saturday that Ozawa could hold talks with Fukuda on the BOJ leadership if the premier withdrew Muto's name and came up with another candidate.

Top government spokesman, Nobutaka Machimura, told a news conference on Monday that it was "incomprehensible" for opposition parties to voice their opposition to Muto before parliamentary hearings to question Muto on Tuesday.

The government on Friday put forward Muto as the next BOJ head and Masaaki Shirakawa, a former BOJ official, and academic Takatoshi Ito as deputy governors. The terms of Muto and fellow deputy governor Kazumasa Iwata also end on March 19.

If a replacement is not found for Fukui by his retirement date, a temporary governor would step in. Analysts say it is unlikely that a stopgap governor would take long-term decisions.