The new Bank of Japan governor is raising his eyebrows at the government's reported plan to inject public funds into the stock market to keep it afloat, instead preferring to let things be decided by market forces.

"Stock prices, interest rates and foreign exchange rates should all be decided by markets," Gov. Masaru Hayami said in a recent interview. "Markets are watching reality (and would not be fooled by an artificial fund injection)."

The government, according to Liberal Democratic Party sources, plans to spend investment funds from postal savings and postal life insurance to stabilize prices by March 31. The plan aims to increase latent profits for companies and financial institutions closing accounts at the end of their business year.

Hayami took the helm of the central bank Friday after his predecessor, Yasuo Matsushita, resigned over the arrest of a BOJ official for alleged bribery. Hayami's opposition to the manipulation of stock prices may reflect his policy of securing independence of the BOJ from the government. The new BOJ Law, which takes effect April 1, is partly designed to make the central bank more self-sufficient.

Yet Hayami believes the nation's financial markets are not sufficiently developed to make the yen a convenient tool of investment and settlement, he said. Various taxes, such as the securities transaction tax, have kept the Japanese stock market unattractive to many foreign investors, he said.

He strongly advocates making the yen a key currency that supplements the role of the dollar, and argues that the yen must be easier to use. But he did not clarify prospects for the key currency status, saying only that he hopes the government will complete the "Big Bang" financial system reform by 2001 as promised.

As for the sluggish economy, Hayami said consumption has not fallen to an abnormal degree. The economy has changed in such a way that a yearly increase in consumption cannot be taken for granted, he said.

He declined to comment on whether the government should shelve its fiscal austerity policy to stimulate the moribund economy, adding, "It is a political question."