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New Bank of Japan boss risks veto New Bank of Japan boss rejected
(31 minutes later)
The Japanese government's latest nominee to be governor of the Bank of Japan (BOJ) risks being vetoed by the opposition-controlled upper house. The Japanese government's latest nominee to be governor of the Bank of Japan (BOJ) has been rejected by the opposition-controlled upper house.
The previous nominee, Toshiro Muto, was vetoed because the opposition said he was too close to the government. The Democratic Party has decided to reject Koji Tanami in Wednesday's vote. The previous nominee, Toshiro Muto, was also vetoed.
But the new candidate, Koji Tanami, has held the same job at the finance ministry that Mr Muto used to have. Both of them are former deputy finance ministers and were accused of being too close to the government.
The current governor, Toshihiko Fukui, is due to retire on Wednesday, raising fears of a power vacuum at the BOJ. The current governor, Toshihiko Fukui, is due to retire on Wednesday.
The choice of governor of the BOJ has to be approved by both houses of parliament, which is a problem for the government, because the upper house is dominated by the opposition. The situation has led to fears of a power vacuum at the BoJ during a period of turmoil across financial markets as a slumping US housing market and a worldwide banking crisis threatens to destabilise key economies around the world.
They are expected to decide its stance later on Tuesday, but Kenji Yamaoka, a senior member of the Democratic Party said there was almost no chance that Mr Tanami would be approved. If a new governor is not chosen by Wednesday, the government can either extend Mr Fukui's term or appoint a temporary governor, who is thought to be the deputy governor Masaaki Shirakawa.
"Personally, I think it is almost impossible," he said. The choice of governor of the BoJ has to be approved by both houses of parliament, which is a problem for the government, because the upper house is dominated by the opposition.
If a new governor is not chosen by Wednesday, the government can either extend Mr Fukui's term or appoint a temporary governor, who would probably be the deputy governor Masaaki Shirakawa. "The conclusion is that we cannot accept him," the Democratic Party's Yoshito Sengoku told reporters.