TOKYO - THE Japanese government plans to put forward Mr Toshiro Muto, a current Bank of Japan deputy governor, as the next governor of the central bank to succeed Mr Toshihiko Fukui, local newspapers reported.

Mr Muto has been long seen as the government's favourite. But opposition parties, whose control of the upper house of Parliament enable them to veto a government nominee, have indicated they are not keen to endorse him.

Some lawmakers from the main opposition Democratic Party have strongly opposed having Mr Muto as governor. They say appointing a former senior bureaucrat such as Mr Muto, who was once vice-finance minister, would hurt the central bank's independence in setting monetary policy.

The terms of Mr Fukui and two deputy governors, Mr Muto and Mr Kazumasa Iwata, end on March 19.

The new governor will take charge at a time when Japan's economic growth is slowing, and some see the central bank cutting its already very low 0.5 per cent interest rates this year.

The Asahi newspaper, along with some other newspapers, reported on Friday that Mr Masaaki Shirakawa, a former BOJ executive director, was seen as a possible candidate for deputy governor.

Another name floating around for deputy governor is the current BOJ board member Kiyohiko Nishimura, business daily Nikkei said.

The government aims to have a parliamentary vote on the new central bank chief possibly next Friday, following parliamentary hearings to question the government nominee, Kyodo news agency reported. The hearings are set for next Tuesday.

Prime Minister Yasuo Fukuda told reporters on Thursday a person with suitable experience, financial expertise and an ability to work on the international stage should head the central bank, regardless of where the person used to work.

Mr Fukuda also said he would be happy to meet Democratic Party leader Ichiro Ozawa if needed to discuss the BOJ leadership. -- REUTERS

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