Japan Post head to quit as govt puts reform on hold-media

TOKYO, Oct 20 - The president of state-owned Japan Post, Yoshifumi Nishikawa, will resign, Japanese media said on Tuesday, as the government prepares to revise a privatisation scheme once applauded as a symbol of bold, pro-market reforms.

Under the previous government's plan, Japan Post was supposed to float its savings and insurance units on the stock exchange as early as 2010 and sell out of them by 2017.

But Prime Minister Yukio Hatoyama's Democratic Party-led coalition, which took power last month, has pledged to freeze the share sale as part of a broad review of the privatisation plan.

The privatisation of Japan Post, which holds $1.8 trillion in household assets, became a symbol of popular leader Junichiro Koizumi's market-friendly reforms and a push to stop using its funds to pay for pork barrel projects.

Koizumi led his long-dominant Liberal Democratic Party to a huge election win in 2005 that was seen as a referendum on the reform plan, but the LDP was ousted by Hatoyama's Democrats and two tiny partners in an Aug. 30 election.

Financial services minister Shizuka Kamei, who heads the tiny ruling coalition partner the People's New Party, has said he wants to present a bill to revise the postal privatisation plan to an extra session of parliament that begins next week.

Some financial market players said Nishikawa's expected departure would be a mostly symbolic event.

"It's not the kind of thing Japanese investors really follow, it's of much more concern for foreign investors as a guide to how Japanese structural reform is going, " said Masayoshi Okamoto, the head of dealing at Jujiya Securities. "But it's very hard to see much of a response in the market."