With Bank of Japan Gov. Masaaki Shirakawa announcing his plan to step down three weeks before this term ends, the battle between the ruling and opposition camps over nominating his successor will only intensify.

With the news, the Nikkei 225 stock average soared 416.83 points. Closing 3.77 percent higher at 11,463.75 points, it was the key market gauge’s best finish since Sept. 29, 2008. The broader Topix, which covers all issues on the first section of the Tokyo Stock Exchange, jumped 29.12 points, or 3.10 percent.

Shirakawa, 63, said Tuesday he will step down March 19, the same day the terms of two deputy BOJ governors run out.

“It’s best for both governor and deputy governors to start on the same day, which will contribute to the Japanese economy,” Shirakawa told reporters, denying speculation that he was forced to resign by Prime Minister Shinzo Abe’s pressure to pursue aggressive monetary easing and set a 2 percent inflation target.

The focus of the nomination process is whether the opposition parties will give the green light to a former Finance Ministry bureaucrat. Abe is expected to present his nominee to the Diet later this month.

Both Diet chambers have to approve the nominees for governor and two deputy governors. Abe’s Liberal Democratic Party, lacking a majority in the Upper House, will need support from opposition forces such as the Democratic Party of Japan, Your Party and Nippon Ishin No Kai (Japan Restoration Party).

Abe has said he wants candidates who will support his aggressive monetary easing, and his shortlist for the top post reportedly includes former Vice Finance Minister Toshiro Muto; Asian Development Bank President Haruhiko Kuroda, who served as vice finance minister for international affairs; University of Tokyo professor Takatoshi Ito; and Gakushuin University professor Kikuo Iwata.

In an about-face from five years ago, the DPJ on Tuesday approved a guideline under which the party won’t automatically reject former Finance Ministry bureaucrats. This was good news for Abe.

Your Party President Yoshimi Watanabe has repeatedly refused to endorse a former Finance Ministry bureaucrat, saying that would constitute “amakudari,” the parachuting of ex-bureaucrats into plum state-related jobs.