The nomination of Koji Tanami was voted down to head the Bank of Japan, a week after the house similarly rejected Toshiro Muto, who too lost after being approved by the lower house where Japanese Prime Minister Yasuo Fukuda's coalition government has a comfortable majority.
The rejection of Tanami, who is the governor of Japan Bank for International Cooperation, is almost certain to leave a leadership vacuum in the central bank as the incumbents, Gov. Toshihiko Fukui and his two deputies, completed their terms Wednesday, Kyodo news service reported.
The upper house, however, approved Kiyohiko Nishimura, a member of the Bank of Japan policy board, as one of the two deputies.
Masaaki Shirakawa, a former Bank of Japan executive director already endorsed by both the chambers as deputy governor, is expected to serve acting governor, Kyodo said.
However, the report said, a Bank of Japan leadership vacuum would be a setback for the Fukuda government at a time of the current global financial turmoil.