By Daniel Leussink and Tetsushi Kajimoto
TOKYO (Reuters) -Japan's&nbsp;government&nbsp;has&nbsp;sounded&nbsp;out&nbsp;Bank of Japan (BOJ) Deputy&nbsp;Governor&nbsp;Masayoshi&nbsp;Amamiya&nbsp;to succeed incumbent Haruhiko Kuroda as central bank&nbsp;governor, the&nbsp;Nikkei&nbsp;newspaper reported early on Monday, citing anonymous&nbsp;government&nbsp;and ruling party sources.
The next&nbsp;BOJ&nbsp;chief will face the delicate task of normalising ultra-loose monetary policy, which is drawing increasing public criticism for distorting market function.
A career central banker who&nbsp;has&nbsp;drafted many of the&nbsp;BOJ's monetary easing tools,&nbsp;Amamiya&nbsp;has&nbsp;been seen by markets as a top contender to take over as next&nbsp;governor.
Prime Minister Fumio Kishida's administration is in the final stages of deciding on successors to Kuroda and two deputy&nbsp;governors and is in discussions with the ruling coalition about&nbsp;the process, the&nbsp;Nikkei&nbsp;said.
The&nbsp;government's nominations will be presented to parliament later this month and take effect upon both houses granting approval, which is effectively a done deal since the ruling coalition&nbsp;has&nbsp;a solid majority.
The&nbsp;Nikkei&nbsp;report did not say whether&nbsp;Amamiya&nbsp;had accepted the offer. When asked about&nbsp;the&nbsp;Nikkei&nbsp;report, Finance Minister Shunichi Suzuki told reporters he had not heard that the&nbsp;government&nbsp;had offered&nbsp;Amamiya&nbsp;the job.
Jiji news agency said&nbsp;Amamiya&nbsp;had not commented to reporters when asked whether he had been&nbsp;sounded&nbsp;out&nbsp;about&nbsp;becoming&nbsp;BOJ&nbsp;governor.
In a news conference on Monday, Deputy Chief Cabinet Secretary Yoshihiko Isozaki said there was no truth to the report the&nbsp;government&nbsp;had&nbsp;sounded&nbsp;out&nbsp;Amamiya&nbsp;for the top&nbsp;BOJ&nbsp;job.
Kishida's choice of a successor to Kuroda, whose five-year term will end on April 8, will likely affect how soon the central bank could phase&nbsp;out&nbsp;its massive stimulus. Inflation hit 4% in December, double the&nbsp;BOJ's 2% target.
The dollar was last up 0.6% at 131.97 yen, following Isozaki's comments. It rose as high as 132.60 yen after the&nbsp;Nikkei&nbsp;report, trading above the 132-level for the first time since Jan. 12, as&nbsp;Amamiya&nbsp;is seen by markets as more dovish than other contenders for the post.
If&nbsp;Amamiya&nbsp;did become&nbsp;governor, his appointment would frustrate investors who are long on the yen and hoping for someone more hawkish, such as former deputy&nbsp;governor&nbsp;Hirohide Yamaguchi, to get the job, said Chris Weston, head of research at Pepperstone.
"Amamiya, if (he) accepts, will have full reign on policy changes and the idea of policy continuation is true here," he said, adding that investors whose base case was for the&nbsp;BOJ&nbsp;to tweak its yield control policy in late April would now be reviewing that call.
Amamiya&nbsp;played a key role in drafting Kuroda's asset-buying programme in 2013 and&nbsp;has&nbsp;consistently called for keeping ultra-low interest rates. But he also said in July the&nbsp;BOJ&nbsp;must "always" think about&nbsp;the means of exiting ultra-loose monetary policy.
Amamiya&nbsp;and Masazumi Wakatabe are currently serving as deputy&nbsp;governors, but their five-year terms end on March 19.
With inflation exceeding its 2% target, markets are rife with speculation the&nbsp;BOJ&nbsp;will start raising interest rates under the successor of dovish Kuroda.
Critics of the&nbsp;BOJ's ultra-loose policy warn of the rising cost of prolonged easing, such as market distortions caused by the bank's relentless defence of its yield cap.
A task force of the opposition Constitutional Democratic Party of Japan on Friday issued a proposal calling on the&nbsp;BOJ&nbsp;to abandon its yield control policy, and target achievement of wage growth that exceeds the pace of inflation.
(Reporting by Daniel Leussink, Tetsushi Kajimoto and Leika Kihara; Editing by Diane Craft and Bradley Perrett)

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Japan's government has sounded out Amamiya about becoming BOJ governor - Nikkei