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New Japan PM takes office, Aso resigns
Updated: 2009-09-16 09:23

TOKYO: New Japanese leader Yukio Hatoyama will take office and finalise his cabinet on Wednesday, putting in place an untested line-up to tackle challenges ranging from restoring economic growth to managing ties with nervous ally Washington.

Prime Minister Taro Aso and 17 other Cabinet ministers resigned en masse Wednesday, paving the way for the launch of a new coalition government scheduled later in the day.

New Japan PM takes office, Aso resigns
Outgoing Prime Minister Taro Aso (Front) arrives at his official residence in Tokyo, capital of Japan, on Sept. 16, 2009.[Xinhua] 

As the Democratic Party of Japan (DPJ) secured a landslide victory in the Aug. 30 lower house election, the DPJ-led coalition with the Social Democratic Party (SDP) and People's New Party (PNP) is set to assume the reins of government.

At the special Diet session to be held later in the day, DPJ President Yukio Hatoyama will be voted in as the new prime minister. And he is expected to launch the tripartite cabinet shortly after he assumes the premiership.

Aso, who also resigned as president of the Liberal Democratic Party (LDP) Wednesday, launched his Cabinet on Sept. 24, 2008, following the abrupt resignation of his predecessor Yasuo Fukuda. His administration lasted almost a year.

Hatoyama, whose Democratic Party of Japan (DPJ) trounced the long-ruling Liberal Democrats in an election last month, faces pressure to make good on campaign promises to focus spending on consumers, cut waste, and reduce bureaucrat control over policy.

"The DPJ has got to come up with an agreed list of priorities quickly, because its manifesto is just a long laundry list," said Koichi Nakano, a professor at Sophia University in Tokyo.

"And it better not just be how they will govern differently, but actual policies," he added. "They can expect something of a honeymoon for a year, but not longer than that."

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Hatoyama's vow to steer Japan on a more independent diplomatic course has also sparked concerns about possible friction with top security ally the United States ahead of his diplomatic debut there next week, where he will meet President Barack Obama.

The US-educated Hatoyama is expected to reassure Obama over ties and perhaps postpone calls for re-negotiation of agreements on US troops stationed in Japan.

He will then return home to face the urgent task of compiling a budget for the year from April 1 as well as finding ways to plug holes in this year's budget caused by sliding tax revenues as Japan struggles out of recession.

The Democrats have promised to scrap public works projects and other programmes they consider wasteful and use freed up cash to stimulate consumption through measures such as payouts to farmers and families with children and ending expressway tolls.

Investors are watching closely to see if the new government's spending programmes will inflate an already massive public debt.

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