Tokyo (AFP) - Japan's government plans to nominate economics professor Kazuo Ueda as Bank of Japan chief, reports said Friday, an unexpected pick that sent the yen rallying against the dollar.
Current governor Haruhiko Kuroda, the central bank's longest-serving leader, is due to step down when his second term ends on April 8.
In his decade at the helm, Kuroda has championed a series of extraordinary monetary easing measures, from a negative interest rate to spending vast sums on government bonds, in an attempt to revive Japan's sluggish economy.
But the BoJ's adherence to its longstanding ultra-loose policy has run counter to other central banks' rate hikes aimed at tackling inflation, causing the yen to lose ground against the dollar over the past year.
Reports in Japanese media including the Nikkei business daily said the decision to nominate Ueda, a former BoJ policy board member, will be presented to parliament on Tuesday.
The ruling coalition's majority means it is almost guaranteed to pass.
Days ago, the Nikkei said deputy governor Masayoshi Amamiya had been approached about taking the top job -- news that prompted the yen to drop as traders anticipated a continuation of the bank's stimulus policies.
But Friday's reports said Amamiya had turned the offer down, and the yen rallied in the afternoon, with the dollar buying 129.82 yen, against 131.54 yen before the news emerged.
Ueda has a PhD in economics from the Massachusetts Institute of Technology and was a member of the BoJ's policy board between 1998 and 2005.
More recently he has worked as an economics professor and dean at the University of Tokyo, and would be the first career academic to become governor.
The Nikkei said Ueda worked at the BoJ when it introduced its zero-percent interest rate policy, and cast a vote against lifting the measure in 2000.
He is therefore seen as a safe choice who will not move too quickly to ditch the bank's easy-money policies, even as it seeks an eventual exit strategy, the newspaper said.
A commentary Ueda wrote for the Nikkei in July was titled "Japan, Avoid Hasty Tightening".
After Kuroda became governor in 2013, he soon unleashed a barrage of massive asset purchases.
The move went hand-in-hand with then-prime minister Shinzo Abe's ambitious plan, dubbed "Abenomics", to stimulate growth and banish the deflation that had plagued Japan's economy since the end of the 1980s boom.
Japanese inflation hit a multi-decade high of four percent in December -- above the BoJ's longstanding two-percent target -- fuelled partly by soaring energy bills.
But because the trend is not driven by demand or steady wage increases, the BoJ under Kuroda has said it sees no reason to abandon its dovish policies.
