Prime Minister Junichiro Koizumi said late Monday he will name a new Bank of Japan governor around Feb. 20, but stopped short of saying who would get the job.

“I had said a successor (to Gov. Masaru Hayami) would be named by the end of February.” Koizumi said. “But I have to pick one a bit earlier.”

Hayami’s tenure expires March 19, and a controversy has been swirling as to whether his replacement will adopt an inflation target. Hayami, who has guided short-term interest rates down to virtually zero, maintains that the BOJ alone cannot tackle deflation.

Koizumi said he will follow a request from the Diet for his administration to decide on the appointment a month before Hayami’s five-year tenure expires.

“We hope it will be done as a personnel appointment subject to Diet approval with the necessary time to spare,” said Hidenao Nakagawa, a leading figure in Koizumi’s ruling Liberal Democratic Party. “Usually, it’s 30 days in advance.”

Among the names analysts and pundits have floated as possible appointments are former BOJ Deputy Gov. Toshihiko Fukui and former BOJ policy board member Nobuyuki Nakahara, a former president of Tonen Corp.

Koizumi has only said he will choose someone who is eager to fight deflation. Earlier Monday he denied he is close to naming Nakahara as Hayami’s successor.

“A false report was floated today, as I’ve reached no conclusion,” Koizumi said in the morning.

His comment came after Kyodo News filed a report on the next BOJ governor and after the yen weakened to the 120 level against the dollar for the first time in Tokyo in nearly a month. The exchange rate movement was seen as a reaction to the report.

Kyodo News quoted a weekly magazine published by an affiliate that reported on talk heard in political circles. The members-only magazine, Kyodo Weekly, said that Koizumi has agreed with close aides that Nakahara is the favorite.

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