Japan's new prime minister, Taro Aso, was tipped to appoint several outspoken nationalist allies for his cabinet on Wednesday, including a China critic for the finance job, while keeping a fiscal reformer in a key post.
Aso, an advocate of spending and tax cuts to boost the economy and expected to call a snap election soon, was voted prime minister by parliament's lower house to take over from Yasuo Fukuda, who quit suddenly this month.
A former foreign minister and manga comic book fan with a propensity for verbal gaffes, Aso confronts an economy teetering on the brink of recession and facing fall-out from the U.S. financial crisis as he takes up the leadership.
Although an outspoken nationalist, Aso is likely to try to keep ties with China on an even keel while strengthening relations with Tokyo's close security ally, the United States.
"We are faced with turbulent times rather than a time of peace in areas like the financial sector, so I am feeling a renewed sense of responsibility," Aso told reporters.
Aso comes from a wealthy family but has a down-home touch that helps him work crowds.
Media and analysts expect him to call a snap poll for parliament's powerful lower house to take advantage of a hoped-for rise in public support after trying to enact a planned emergency economic package.
CABINET TAKES SHAPE
Aso was to name former trade minister and China critic Shoichi Nakagawa for the finance portfolio and keep Economics Minister Kaoru Yosano, a fiscal conservative, in a cabinet to be formed later on Wednesday, Japanese media said.
"Yosano seems to be remaining in the cabinet, so a certain level of fiscal discipline will be retained, but you can't avoid the impression that reform drives are weakening," said Takumi Tsunoda, a senior economist at Shinkin Central Bank.
Upper house lawmaker Hirofumi Nakasone, 62, a former education minister and son of ex-prime minister Yasuhiro Nakasone, would be foreign minister, media said.
Close conservative allies including Nariaki Nakayama, who heads a group of ruling Liberal Democratic Party (LDP) lawmakers that denounced the 1937 Nanjing Massacre as a fabrication, were also tipped for posts.
Beijing says Japanese troops killed 300,000 people in what was then the Chinese capital, while an Allied tribunal put the death toll at about 142,000.
Some analysts said the cabinet was designed to put the spotlight on Aso as a strong leader, though the inclusion of right-leaning lawmakers could worry overseas observers.
"People abroad could be worried that the Nakagawa-Aso line is more to the right than Fukuda's stance," said Keio University professor Yasunori Sone.
In a move that could appeal to voters, Aso was tipped to name 34-year-old Yuko Obuchi, daughter of a former prime minister and mother of one-year-old boy, to take charge of policies to boost Japan's rock-bottom birth rate.
SNAP ELECTION LOOMS?
Aso has said he wants to pass an extra budget to help consumers and firms cope with high prices, and media predict he could then call an election for Nov. 2 or Nov. 9.
The ruling coalition has a huge majority in the lower house, but policies have been stalled since the opposition won control of the upper house last year, allowing it to delay laws.
The deadlock, and a string of scandals, slashed support for the two previous prime ministers, leading them to quit abruptly.
Reflecting the division, parliament's upper house voted for opposition Democratic Party leader Ichiro Ozawa, 66, as prime minister, although the lower chamber vote takes precedence.
Analysts say the ruling bloc is likely to lose in the next election the two-thirds lower house majority that allows it to override upper house vetoes and some pundits say the LDP, which has ruled for most of the past half-century, could be ousted.
But many predict that a clear victory for either side will prove elusive, setting the stage for more policy paralysis and possibly a shake up of party allegiances.
