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Japan Opposition Democrats Back Ikeo for BOJ Board

Japan's main opposition Democratic Party will back Kazuhito Ikeo, a government nominee to join the Bank of Japan's rate-setting board, a party official said on Thursday.

Japanese businessmen cross a road in front of the Bank of Japan Tuesday, Feb. 20, 2007. The strength of Japan's economic growth is among the factors the central bank will weigh as its policy board begins a two-day meeting to decide whether to raise interest rates. (AP Photo/Katsumi Kambayashi)
Katsumi Kasahara
Japanese businessmen cross a road in front of the Bank of Japan Tuesday, Feb. 20, 2007. The strength of Japan's economic growth is among the factors the central bank will weigh as its policy board begins a two-day meeting to decide whether to raise interest rates. (AP Photo/Katsumi Kambayashi)

Ikeo, an economics professor and expert on financial systems, would fill one of the two vacancies on the nine-member board if parliament approves his appointment, which it may do as early as Friday now he has the backing of the Democrats.

Ikeo is seen by some analysts as a hawk because he opposes boosting growth through monetary easing and has said interest rates should be lifted to an appropriate level in the long run to help invigorate the economy.

"The party executives endorsed Ikeo's appointment to the BOJ board," the official told Reuters after a meeting of the opposition party held to consider a range of government appointments.

Ikeo needs approval from both houses of parliament, including the opposition-controlled upper house, which has voted down four past BOJ nominees, partly because of their close relations with the government.

Illustrating the problems in a split parliament, Ikeo's nomination almost failed last week when opposition lawmakers protested that his name had been leaked to the media before it went to parliament. But they accepted a government apology and have shown no strong opposition to Ikeo since then.

Senior government officials have yet to come up with a nomination for the other vacancy, for deputy governor.