By Mayumi Otsuma
Tokyo, Dec. 24 (Bloomberg) -- Japan's Finance Ministry will replace its head of foreign exchange policy in an annual reshuffle that economists said will maintain the government's effort to keep the yen from rising against the dollar.
The ministry named Zembei Mizoguchi, 56, to take over the post of vice finance minister for international affairs, now held by Haruhiko Kuroda. Mizoguchi is director-general of the ministry's international bureau.
Japan's finance officials have said they may act to stem recent gains in the yen that threaten to stall exports and hamper economic growth. The new appointment won't alter that position, analysts said.
``The public statements by Mizoguchi so far have been in line with MOF official policies,'' said Marshall Gittler, senior foreign exchange strategist in Tokyo with Deutsche Bank AG, the third-largest trader. ``Everything we know about him seems to indicate he's cut from the same cloth as Kuroda.''
The dollar traded at 120.38 yen as of 1:47 p.m. in Tokyo, little changed from 120.44 late yesterday in New York. The reshuffle will take effect on Jan. 14.
Finance Minister Masajuro Shiokawa also said the reshuffle won't change the ministry's foreign exchange policy.
``Drastic swings in foreign exchange rates are the most damaging thing for the economy, and we want to ensure that this is avoided,'' Shiokawa said after a Cabinet meeting.
The new officials ``don't want a strong yen,'' said Mamoru Yamazaki, chief economist at Barclays Capital Japan Ltd. ``They'll try to keep the yen from rising beyond the 120 yen level.''
Rising Debt
Shiokawa had delayed the personnel reshuffle, which usually takes place in June, saying the government wanted to first curb growing public debt and revitalize the economy.
Economic growth later stalled and the government last month abandoned its self-imposed 30 trillion yen ($250 billion) limit on new bond sales to pay for extra spending in the current fiscal year. Today, the government proposed a record 36.4 trillion yen in new bond sales for the year that starts on April 1.
The ministry moved ahead with the reshuffle after the budget established a policy direction, Shiokawa said.
Hiroshi Watanabe, deputy chief of the international bureau, will succeed Mizoguchi. The ministry will replace Vice Finance Minister Toshiro Muto with Masakazu Hayashi, head of the budget bureau.
Shiokawa today also called on the central bank to take stronger measures to halt a decline in prices.
``Japan's priority is to stem deflation and I want the Bank of Japan to show its commitment,'' he said. ``I hope the central bank will clearly announce to the Japanese people what it can do, and do its best to achieve the goal.''