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Nakao nominated to head ADB

Bloomberg

Japan announced Thursday that it will nominate its top currency official, Takehiko Nakao, to head the Asian Development Bank as Haruhiko Kuroda prepares to step down to lead the Bank of Japan.

Nakao has “extensive experience in international finance and development,” Finance Minister Taro Aso said in a statement in Tokyo. The vice finance minister is “the most qualified candidate,” he said.

Aso didn’t say who would replace Nakao. The previous two appointments resulted from promoting the head of the ministry’s International Bureau, who is currently Tatsuo Yamasaki, 55.

Mitsuhiro Furusawa, 57, head of the Financial Bureau and a former International Monetary Fund official, may replace Nakao, some media reports said.

Japan has held the presidency of the Manila-based ADB since it was founded in 1966, and is tied with the U.S. in having the largest voting power at the development bank. China lacks sufficient support to grab the role and Japan can retain its hold, said Masahiro Kawai, dean of the Tokyo-based Asian Development Bank Institute, in an interview in January.

“Japan wants a Japanese person at the top of the ADB to maintain a level of global influence,” said Hideo Kumano, chief economist at Dai-ichi Life Research Institute and a former central bank official. “There won’t be any change in Japan’s currency policy when Nakao is replaced at (the Finance Ministry).”

Prime Minister Shinzo Abe nominated Kuroda, who has led the ADB since 2005, as central bank governor last week. Current BOJ Gov. Masaaki Shirakawa steps down on March 19.

Nakao, 56, oversaw the government’s biggest ever one-day currency market intervention, on Oct. 31, 2011, after the yen reached a postwar high of 75.35 per dollar. The currency has fallen about 12 percent in the past three months on expectations for more aggressive monetary easing to counter deflation.

In a statement Thursday, Nakao said he will ensure the ADB is backed by sufficient financial resources if chosen as president.

Nakao, who joined the Finance Ministry in 1978 and has an MBA from the University of California, Berkeley, wrote the 2008 book, “America’s Economic Policy: Can it Sustain its Strength?”