It looks like the next Bank of Japan (BOJ) chief could be the current chairman of private think-tank Daiwa Institute of Research. Sources revealed today that Prime Minister Shinzo Abe is close to naming nominees for the position, which will be left vacant by Masaaki Shirakawa come March 19, and Toshiro Muto is leading in the shortlist of candidates.
According to reports, Abe and his advisers have narrowed it down to two or three people. They have decided to exclude academic and private-sector economists and favored those with bureaucratic experience instead. The short-list still includes Asian Development Bank head Haruhiko Kuroda and former government economist Kazumasa Iwata, who also served as deputy BOJ governor from 2003 to 2008. The sources also revealed that academicians, who are advocating unorthodox policy measures and were earlier considered dark-horse candidates, like economics professor Kikuo Iwata, are possibly already ruled out.
Abe must obtain the approval of both houses of parliament for his nomination to be successful. Note that his ruling Liberal Democratic Party (LDP) does not have the majority in the upper house, so he obviously needs cooperation from opposition parties, but it’s no secret that some are opposed to having a former finance bureaucrat to lead the BOJ. In any case, Abe is expected to reach a final decision in the next couple of days, said insiders who declined to be identified because the decision is still pending.