Haruhiko Kuroda, former vice finance minister for international affairs and an advocate of radical monetary-easing measures by the Bank of Japan, was appointed Friday as a special adviser to the Cabinet.
The appointment by Prime Minister Junichiro Koizumi came after Toshihiko Fukui, former BOJ deputy chief, was nominated as Masaru Hayami's successor as head of the central bank. Fukui will take up his new post March 20.
Although Koizumi faces an urgent battle to stem deflation, Fukui is perceived as a policy moderate.
Kuroda has urged the bank to take bold action, including setting an inflation target. His appointment may help crank up government pressure on the BOJ, according to some observers.
"You have to see Japan's economic problems from an international perspective, and (Kuroda) is well-versed in international finance and economics," Koizumi told reporters. "I expect him to give me good advice on those issues."
Kuroda, who retired from the Finance Ministry in January after serving as vice minister for 3 1/2 years, was once considered a candidate to succeed BOJ Gov. Masaru Hayami.
Kuroda becomes the third Koizumi Cabinet adviser, following in the footsteps of Yukio Okamoto on foreign policy and Kyoko Nakayama, who is in charge of helping Japanese nationals abducted by North Korea.