Japan's new leader, Taro Aso, may pick former trade minister and China critic Shoichi Nakagawa as finance minister, a newspaper reported on Tuesday, amid speculation of a November snap election.
Aso, an outspoken nationalist and advocate of tax cuts and spending to boost the economy, won the ruling Liberal Democratic Party (LDP) leadership vote by a landslide on Monday to take over from Yasuo Fukuda, who quit suddenly this month.
Aso, a former foreign minister, will wrestle with an economy skirting recession and facing fall-out from the U.S. financial crisis after he is confirmed by parliament on Wednesday as Japan's third prime minister in a year.
Despite a big LDP majority in parliament's lower house, government policy has been stalled since the opposition won control of the upper house last year, allowing it to delay laws.
The Yomiuri newspaper said Aso was leaning toward picking Nakagawa, a close ally, for the finance post to spice up his cabinet before an election he was expected to call within a couple of months, to seek a mandate to end the stalemate.
Economics Minister Kaoru Yosano, a fiscal conservative who came a distant second in the leadership race, was likely to keep his job while another rival, former defence minister Shigeru Ishiba, was likely to get a post, Yomiuri and other media said.
The LDP hopes Aso, 68, scion of an wealthy family who has cultivated an image as a "cool old dude" in tune with manga-loving youth, can stave off defeat at the polls despite signs that many voters are fed up with the party that has been in power for most of the past half-century.
"Usually, a new prime minister would establish a track record and then appeal to the people. But this time is different. They want to call an election as soon as possible before expectations toward the new government fade," the liberal Asahi paper said.
The ruling bloc, however, is expected to lose in the next election the two-thirds lower house majority that allows it to override upper house vetoes, and analysts say a clear victory for either side may prove elusive, leaving more policy paralysis.
"The LDP inherited by Aso is in an unprecedented crisis," the Asahi said.
ELECTION TIMING
Aso has said his priority was to pass an extra budget to help stimulate the struggling economy, prompting Japanese papers to suggest a snap election on Nov. 2 or 9, once that was done.
"International financial and securities businesses are suffering a severe shock and with the impact of that and high oil prices, the Japanese economy is entering recession," said Hiroyuki Hosoda, the LDP's newly appointed secretary-general.
"We want to put priority on economic policy and the extra budget," Hosoda told NHK public TV. "We are not discussing things with the idea of an early snap election as a given."
Aso is expected to announce his cabinet line-up on Wednesday.
As trade minister, Nakagawa, 55, pushed for free trade deals despite opposition from Japan's long-protected farm sector.
Nakagawa, like Aso, is known for controversial remarks. In 2006, he cause an uproar by saying Japan, the only country to have been hit by atomic bombs, should debate whether to acquire nuclear weapons, after nuclear and missile tests by North Korea.
He has also warned that China's growing military clout could result in Japan becoming just a Chinese province.
Several ministers, including Health Minister Yoichi Masuzoe, were likely to be reappointed, while former education minister Hirofumi Nakasone, the son of former prime minister Yasuhiro Nakasone, was being floated as a possible foreign minister, the Yomiuri said.
Other close Aso allies, including former justice minister Kunio Hatoyama, were also likely to get posts, the paper added.
Controversy dogged Hatoyama when he was previously justice minister. He was rebuked by a top government spokesman for saying a "friend of a friend" was a member of al Qaeda who had entered Japan on various passports and was dubbed the "Grim Reaper" by a columnist for approving a record number of executions.
