BOJ Hayami: Decision on successor not imminent

"The personnel decision on the next governor is far from imminent," Jiji news agency quoted Hayami as telling reporters in Basel, Switzerland, where he was attending a meeting of the Bank for International Settlements.

Hayami's comments echo those by Japanese Prime Minister Junichiro Koizumi, who said on Saturday that nothing had been decided yet and that he would make the appointment by the end of February.

There was strong speculation that Hayami's successor may be picked as early as this week after Finance Minister Masajuro Shiokawa said last week an appointment must be made by the start of the next parliamentary session, which convenes on 20 January.

The nomination is made by the cabinet and needs to be approved by the parliament.

Financial markets are keen to find out who will replace Hayami, whose term expires on 19 March, as it may lead to a change in the central bank's monetary policy.

With falling prices widely seen as the root cause of a prolonged economic slump, Koizumi has repeatedly said that taking a hard line against deflation was a prerequisite for the job.

The two front-runners in the race are thought to be Nobuyuki Nakahara, a former oil company chief who waged a lone battle for radical easing as a BOJ policy board member until April, and Toshihiko Fukui, an ex-BOJ official who probably prefers the status quo.