TOKYO (MNI) – Japanese Prime Minister Naoto Kan on Friday
reshuffled his three-month-old cabinet and top ruling party lineup,
appointing close allies to key posts and further reducing the influence
of rival Ichiro Ozawa, who lost to Kan in the party leadership race this
week.

Kan picked current Foreign Minister Katsuya Okada, 57, who once led
the Democratic Party of Japan when it was in the opposition camp, for
the new secretary-general of the DPJ, the number two post after the
party president.

Transport Minister Seiji Maehara, who is also a Kan supporter and
has led the DPJ in the past, will replace Okada.

Finance Minister Yoshihiko Noda, another closes ally of Kan’s who
directed Japan’s first yen-selling forex intervention in six years this
week, retained his job, as did Financial Services and Postal Reform
Minister Shozaburo Jimi, the only cabinet member from the DPJ’s small
coalition partner.

Chief Cabinet Secretary Yoshito Sengoku will also remain in his
position.

Banri Kaieda, who supported Ozawa, will become the economic and
fiscal policy minister, replacing Satoshi Arai, a long-time ally of
Kan’s.

Koichiro Gemba, who remains the chair of the DPJ’s Policy Research
Committee, will double as minister in charge of national policy, which
is believed to be prompting closer coordination between top government
policymakers and party officials.

Kan had sounded out Ozawa about becoming acting party leader, but
he rejected the offer as the post carries no actual policy-making
weight. ave

On Tuesday liberal Prime Minister Kan scored an overwhelming
victory in the ruling party leadership race against conservative
lawmaker Ichiro Ozawa, reflecting a public call for the incumbent to
continue his policy of creating jobs, fighting poverty and ensuring
social security even through a sales tax hike.

Kan won a total of 721 points in the Democratic Party of Japan
presidential election, beating Ozawa, who gained only 491 points.

While Kan, 63, has a grass-roots activist background and is known
for his fiscal conservatism, Ozawa, 68, is a behind-the-scenes dealmaker
who has in the past led the DPJ to major parliamentary election wins
with promises of larger program spending.

Kan also plans a business tax cut in order to prevent firms from
moving their operations overseas, which would reduce jobs in the
domestic market.

tokyo@marketnews.com
** Market News International Tokyo Newsroom: 81-3-5403-4833 **

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