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Japan's lower house approves BoJ nominations

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(Globalpost/GlobalPost)

The government's nominees to lead the Bank of Japan won approval from the lower house of parliament Thursday, moving the trio a step closer to taking the top jobs at the central bank.

Proposed BoJ Governor Haruhiko Kuroda, a finance veteran who has announced his resignation as head of the Asian Development Bank, is widely expected to win upper house confirmation on Friday.

The lower house Thursday also approved Kuroda's proposed deputies, Kikuo Iwata and Hiroshi Nakaso, with both also on course to win upper house support, clearing the way for them to take up the central bank posts.

Japanese media have said the largest opposition party would not back Iwata, throwing his hiring into question although the nomination is still widely expected to get through the upper house.

Iwata is a strong supporter of giving Tokyo more control of the independent BoJ, and is also an advocate of further aggressive monetary easing.

The new BoJ management team is slated to take office next week.

Prime Minister Shinzo Abe nominated the 68-year-old Kuroda, also a former finance ministry bureaucrat, who is likely to back the premier's prescription of big spending and aggressive monetary easing to drag Japan out of years of deflation which has crimped private spending and corporate investment.

During parliamentary confirmation hearings, Kuroda vowed that he would do "everything possible" to reverse years of falling prices, while criticising previous BoJ administrations for failing to fix the problem.

"We will do everything possible to get rid of deflation," Kuroda told lawmakers earlier this month.

Since coming to power in December after landslide national elections, Abe ramped up a pressure campaign on BoJ policymakers to launch more aggressive policy and adopt a two-percent inflation target aimed at beating deflation.

Outgoing BoJ chief Masaaki Shirakawa, who sparred with Abe over policy matters, adopted the measures in January under heavy pressure.

In contrast, Kuroda has openly praised Abe's policies, and argued that the BoJ must also expand its monetary easing programmes to boost the world's third-largest economy which has suffered slow growth for years.

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http://www.globalpost.com/dispatch/news/afp/130314/japans-lower-house-approves-boj-nominations