With the opposition-controlled House of Councilors' veto Wednesday of Toshiro Muto's nomination for Bank of Japan governor, the prospects are mounting that the BOJ helm will become vacant after Toshihiko Fukui's term ends March 19.
The looming vacancy at the top of the BOJ comes at a critical time for the global economy and just as the Federal Reserve and four other central banks Tuesday agreed to a massive capital injection into ailing financial markets.
"It is as if all the fire engines in the world are set to be dispatched in this state of emergency but only Japan is not able to send one," said Hideo Kumano, chief economist at Dai-ichi Life Institute. "Confidence in the BOJ will decline."