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Japan to announce central bank chief candidate today

Japan's central bank began a two-day policy board meeting yesterday, the last under Governor Toshihiko Fukui, whose replacement the government will announce today.

The government is expected to push a deputy governor at the Bank of Japan, Toshiro Muto, who is also a former bureaucrat at the powerful Ministry of Finance. But opposition parties, eager to wield their influence, may block that nomination.

Meanwhile, the bank is largely expected to keep interest rates unchanged amid worries about the global ripple effects of a US credit crunch and possibility that Japan could slip into recession as consumer buying slows, wages dwindle and company investments drop.

The term of Bank of Japan Governor Toshihiko Fukui ends on March 19.

The opposition parties -- reported to favor Yutaka Yamaguchi, another deputy governor at the bank -- control the upper house of parliament, and they have hinted that they will block the government nomination.

The prospect that the central bank's governor seat may go vacant has alarmed some people, including Japanese Prime Minister Yasuo Fukuda.

In an apparent effort to quell such worries, chief government spokesman Nobutaka Machimura told reporters yesterday the government will announce its candidate for central bank chief today.

He did not say who the appointment might be. The dissent voiced by the main opposition party makes it unclear if Muto remains Fukuda's choice.
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