ADB's Kuroda pulls ahead in race to lead Bank of Japan: media

Sun Feb 24, 2013 4:32am EST
 

By Leika Kihara

TOKYO (Reuters) - Asian Development Bank chief Haruhiko Kuroda is leading the race to become the new governor of Japan's central bank, according to media reports on Sunday, as Prime Minister Shinzo Abe nears a decision on who will head the bank's fight against deflation.

The government has said it will decide its nominee this week and Abe was expected to huddle with aides to reach a final decision after returning from a U.S. trip on Sunday.

Still, whoever Abe nominates is not certain to get the job because the appointment must be approved by both houses of parliament.

Abe's ruling bloc does not have a majority in the upper house, and as a result the government will consult opposition parties before naming its choices for the Bank of Japan's (BOJ)top posts - the governor and two deputy governors - when incumbents retire on March 19.

Former top financial bureaucrat Toshiro Muto had been considered the leading candidate to replace Masaaki Shirakawa, who leaves after a five-year term. Muto remains on the shortlist, strongly backed by officials at the Ministry of Finance.

But evidence is building that the race between Muto, ADB President Haruhiko Kuroda and former BOJ deputy governor Kazumasa Iwata may be closer than thought, say officials and lawmakers familiar with the selection process.

Abe, who won a resounding election victory in December promising to finally rid Japan of nearly 20 years of deflation, wants a fresh face in the job, someone keener to experiment with radical measures, the sources said.

"Muto is preferred by finance ministry bureaucrats, while people close to Abe want someone else," said one of the sources, who spoke on condition of anonymity due to the sensitivity of the matter.   Continued...

 
Daiwa Institute of Research Chairman and former Bank of Japan Deputy Governor Toshiro Muto speaks during an interview with Reuters in Tokyo September 11, 2012. REUTERS/Yuriko Nakao