Japan PM, seeking revival, to shake up cabinet

By Staff
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TOKYO, Aug 27 (Reuters) Japanese Prime Minister Shinzo Abe tapped a close ally as his party's No. 2 and was to announce a new cabinet line-up today to try to revive faltering support a month after his coalition suffered a massive election defeat.

Attention is focused on whether Abe, 52, who took office a year ago with an ambitious conservative agenda, will seek to widen support in his Liberal Democratic Party (LDP) by tapping rivals or drafting backers from the private sector.

''People have low expectations. This is unlikely to be the start of a new honeymoon for Abe,'' said Jesper Koll, president of Tantallon Research Japan, an investment advisory firm.

Financial market players are seeking clues as to whether Japan will press on with market-oriented reforms and efforts to cut its huge public debt after the opposition's successful appeal to voters who felt left behind by policy changes.

Finance Minister Koji Omi may be replaced, but the conservative Sankei newspaper said today that Economics Minister Hiroko Ota, a former economics professor, was set to keep her job.

Ahead of the cabinet reshuffle, outspoken Foreign Minister Taro Aso, a close ally and would-be prime minister who shares many of Abe's conservative policy goals, was chosen as LDP secretary general, the party's number two post.

The 66-year-old political veteran is well-known as a fan of ''manga'' comics, but has stirred controversy with verbal blunders.

''The important issue for the LDP is how to restore confidence in the party,'' Aso told a news conference after his appointment to the party post. ''What we must do is show how we will deal with the people's anxiety about the future.'' Abe's support ratings have sunk as low as 22 per cent, media surveys show, and pressure to resign will mount if the cabinet reshuffle fails to win public approval.

PUBLIC APPROVAL? Aso gave a nod to the anger felt in Japan's rural regions, many of which have suffered from reductions in public works spending as the government tries to rein in its huge debt.

''When reforms take place too quickly, vested interests are destroyed and there is pain. When the pain hits too quickly, it needs to be treated with measures such as shots to get rid of the pain or a blood transfusion,'' he said.

''It is absolutely possible to have steps to improve the economy and to achieve administrative reforms.'' Abe was likely to appoint former foreign minister Nobutaka Machimura, 62, a conservative who heads the LDP's biggest faction from which Abe hails, as chief cabinet secretary, media reported.

The holder of the heavyweight portfolio acts as liaison between the administration and the ruling parties and serves as top government spokesman.

Japan's first female defence minister, Yuriko Koike, said on Friday she wanted to quit her post.

Abe's previous cabinet, packed with close allies, was caught up in financial scandals and gaffes, casting doubt on his leadership and contributing to a ballot-box drubbing that gave opposition parties control of parliament's upper house in July.

Government mishandling of records of millions of premiums paid into the public pension system by voters -- already worried about how their rapidly ageing country will care for them in their old age -- was another big factor behind the election loss.

Abe has been accused of focusing too much on his conservative agenda including revising the pacifist constitution and forging a bigger global security role for Japan, while voters worried about bread-and-butter issues such as pensions and health care.

REUTERS RN BD1046

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