Bank of Japan deputy chief Toshiro Muto is less likely to become the next governor since the opposition won last month's election, casting doubt on the central bank's plan to gradually raise interest rates.
The number of economists predicting Muto will replace Toshihiko Fukui, whose five-year term expires in March, dropped to eight out of 15 last week from all 15 in June, according to Bloomberg surveys.
The Democratic Party of Japan-led opposition's control of the Upper House allows it to block nominations for the job. That could reduce Muto's chances and increase those of someone who might break from Fukui's plans to increase borrowing costs. The DPJ disapproved of Muto's appointment as deputy governor in 2003, citing his background at the Finance Ministry.