TOKYO (Reuters) ? New Japanese Prime Minister Yoshihiko Noda will appoint relatively unkown former parliamentary affairs chief Jun Azumi as finance minister after his first choice, Katsuya Okada, turned it down, local media reported on Friday.
Azumi will take charge of Japan's currency and fiscal policies at a time when the world's third-largest economy grapples with the yen's sharp appreciation and a public debt twice the size of its $5 trillion economy.
Okada is a fiscal conservative like Noda, who was himself finance minister before taking the top job. He turned down the offer to be finance minister, public broadcaster NHK reported, but no reasons were cited.
"Noda's stronghold is the finance ministry. Assuming he is going to leverage that, no politician wants the job because fiscal, budget and tax policy are going to be led by the prime minister," said Jesper Koll, director of equities research at JPMorgan in Tokyo.
"Whoever Noda will nominate, the finance minister will likely be a 'yes-man' for Mr Noda."
Azumi, 49, a former journalist born in a disaster-hit town in Miyagi prefecture led campaign in upper house election in 2010 that the ruling Democratic Party lost badly. Little is know about his views on fiscal policy.
Noda was voted in by parliament this week as the nation's sixth leader in five years.
The finance portfolio is probably the toughest cabinet job as the minister has to try to contain ballooning debt while seeking to stimulate growth. The turnover at the helm of the ministry has exceeded even that in the top government post and the new minister will be Japan's ninth since 2006.
NHK also reported that Noda will name as trade minister Yoshio Hachiro, a ruling Democratic Party lawmaker and a former member of the Social Democratic party who was formerly in charge of parliamentary affairs.
The trade minister is responsible for national energy policy.
Media reports also put Motohisa Furukawa, a former finance ministry bureaucrat, in charge of the economics ministry and Koichiro Gemba, 47, the ruling party's chief negotiator with opposition parties over key policies and supporter of tax reform debate, in charge of the foreign ministry.
The new government line-up is expected around 10:45 a.m. (0145 GMT), according to media reports.
Market reaction to the report on Okada was muted as many analysts expect Noda to spearhead economic and fiscal policy himself, and unlikely to choose a finance minister with markedly different views.
"Since the former finance minister has become the prime minister, the situation will remain stable and secure and the same basic policies will continue," said Kenichi Hirano, operating officer at Tachibana Securities.
It was not immediately clear why Okada turned down the job although he has recently indicated he would like to get some rest after serving as party secretary-general under previous prime minister Naoto Kan.
Noda's new government will face numerous daunting challenges, including forging a new energy policy amid worries over power shortages and a radiation crisis at the Fukushima nuclear plant, rebuilding Japan's tsunami-ravaged northeast and finding funds to pay for both the reconstruction and mounting social welfare costs in Japan's aging society.
His immediate challenge is to draft and enact a third emergency budget to finance reconstruction spending.
He must also unite warring factions in his fractious Democratic Party while reaching out to the opposition in a divided parliament.
(Additional reporting by Linda Sieg Edmund Klamann; Writing by Tomasz Janowski; Editing by Raju Gopalakrishnan)
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