JAPANESE Prime Minister Shinzo Abe nominated Asian Development Bank president Haruhiko Kuroda as prospective new governor of the Bank of Japan (BOJ), which is expected to work more closely with the government in overcoming long-running deflation and stagnation and pushing Japan onto a higher growth path. Mr. Kuroda was first elected president of the ADB in November 2004 and assumed office in February 2005. He was re-elected for a third term in November 2011.

He will formally step down as head of the bank on March 18. Mr. Abe also nominated Kikuo Iwata, an outspoken academic economist, and Hiroshi Nakasao, an executive director who currently heads BOJ's international operations, to become deputy governors. The appointments have been much canvassed and the announcement produced little reaction in Tokyo's financial markets.

But they still have to be approved by both houses of parliament. Mr. Iwata's nomination could face resistance from some members opposed to his approach to monetary policy. While Mr. Kuroda appears to support broad monetary easing based on increased purchases by the BOJ of government bonds and other assets such as corporate bonds or exchange traded funds, Mr. Iwata is said to favour buying more long-dated government bonds, which some argue will aggravate Japan's existing fiscal problems. Mr. Kuroda's likely appointment as BOJ head, meanwhile, opens up the question of who will succeed him as president of the ADB.

His departure from the Manila-based development bank several years ahead of the scheduled date could create a power vacuum at the bank for a while, some suggest, Among Japanese candidates, current Vice-Finance Minister for International Affairs Takehiko Nakao has been most widely canvassed but it would be unusual for a finance ministry official to jump direct from that position to head of the ADB without first gaining further experience.