Koizumi elected as Japan's new PM

Koizumi has pledged to bring a new style to Japanese politics

In this story: Positives Wave of popularity Top positions RELATED STORIES, SITES

By staff and wire reports

TOKYO, Japan -- Junichiro Koizumi, a reformer with a nationalist image, has been elected as Japan's 11th prime minister in 13 years.

Koizumi replaces the hugely unpopular Yoshiro Mori -- whose tenure was punctured by a series of gaffes -- and now faces the task of revitalizing Japan's stagnating economy.

In his campaign for the leadership Koizumi has vowed to bring a new style to Japanese politics, promising to select cabinet members solely on merit, not as the result of backroom factional dealings.

VIDEO CNN's Marina Kamimura talks about change that could occur with Koizumi as prime minister Play video (QuickTime, Real or Windows Media)   AUDIO Junichiro Koizumi at his first press conference as President of Japan's governing party. 2.99Mb/4:44 min. AIFF or WAV sound CNN's Marina Kamimura discusses the change in leadership of Japan's Liberal Democratic Party 1.14Mb/1:41 min. AIFF or WAV sound   ALSO New leader Koizumi courts controversy Koizumi has uphill battle for reform Business welcomes change to Koizumi TIMEasia.com: -- 'People Believe I Can Change Japan'     MESSAGE BOARD Japan

Backed by a three-way ruling coalition, Koizumi won a majority of votes in parliament's Lower House. The vote was 287 in favor of Koizumi out of a possible 478.

Earlier Thursday, the cabinet of the outgoing Prime Minister Mori resigned en masse, as tradition demands, to make way for Koizumi.

"The Mori cabinet resigned today at the last cabinet meeting ahead of the formation of a new cabinet," said Kazuhiro Koshikawa, deputy press secretary for Mori who leaves office as one of the most unpopular prime ministers of his time.

Elected as leader of the ruling Liberal Democratic Party on Tuesday, Koizumi, 59, has vowed to ignore the factional power plays that have so long dominated Japan's political landscape.

Positives

In an early positive sign for financial markets, media reports said Thursday that Hakuo Yanagisawa, the highly regarded head of Japan's financial watchdog, would keep his post.

That would allow him to press ahead with a cleanup of the bad loans that have weighed on banks and stifled growth for more than a decade.

Business daily Nihon Keizai said Koizumi would probably name as his minister of fiscal and economic policy Heizo Takenaka, an economics professor at Tokyo's Keio University who served as an adviser to two previous cabinets, including that of Mori.

Octogenarian Finance Minister Kiichi Miyazawa told a news conference he had not been asked to be in the new cabinet, but newspapers said it was still uncertain who would replace him.

Some media earlier floated former LDP executive Koichi Kato, a reformist Koizumi ally who last year led a failed rebellion against Mori, for the key finance post.

A popular supporter of Koizumi, iconoclast LDP lawmaker Makiko Tanaka, was also being tipped for a cabinet post.

Tanaka, the daughter of the late LDP kingmaker and founder of Japan's postwar machine politics Kakuei Tanaka, is a harsh critic of the long-ruling party's rigid conventions and ranks high in surveys of who voters would like to see as prime minister.

Wave of popularity

Koizumi rode to power on wave of popularity within the LDP rank-and-file members, and in doing so beat the early leadership favorite and LDP powerbroker, former Prime Minister Ryutaro Hashimoto.

His "Change the LDP, Change Japan" platform won resounding support from local party members deeply afraid of losing the July election for parliament's Upper House.

However, he has been deliberately vague as to how his reformist rhetoric will translate into policies.

Koizumi has said he would only reveal the specifics of his policies once he had appointed his cabinet.

Attention is now focused on whether Koizumi, once dubbed an eccentric but now seen as a potentially bold reformer, can keep his campaign promise to break the bonds of factional fiefdoms in selecting his new cabinet.

"I want to appoint those who are zealous about reform," Koizumi told reporters.

Koizumi shot to the top party post after the ruling bloc decided to ditch the hugely unpopular Mori in the lead-up to the crucial Upper House election. Japan will hold its Lower House elections at the end of the year.

Media and analysts have said Koizumi's victory in the LDP race on Tuesday over Hashimoto, the establishment favorite, signaled a seismic shift inside a party long seen by voters as tainted by corruption, bound by special interests and dominated by factional feuding.

Top positions

But his choices for a trio of top positions in the LDP on Wednesday indicated that -- as anticipated -- Koizumi was engaged in a delicate balancing act between party harmony and reform.

Koizumi chose reformist ally Taku Yamasaki, head of a small faction, as secretary general of the LDP, a move analysts welcomed as a sign times were changing.

But a question mark hangs over his choice of outgoing Economics Minister Taro Aso for the post of LDP policy chief.

Aso's stress on keeping the economy from slipping into negative territory contrasts with the higher priority Koizumi has placed on structural reform.

Skeptics worry Koizumi will backpedal on fiscal and economic reform to maintain support from those in the LDP who advocate more public spending to keep Japan's fragile economy afloat.

Koizumi campaigned on a proposal to cap Japanese government bond issuance at 30 trillion yen ($245.6 billion) as a way to start getting a grip on the huge public debt.

On Wednesday, though, Aso said that proposal was simply "one option."

The Associated Press & Reuters contributed to this report.

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Liberal Democratic Party of Japan
Japanese Prime Minister

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