Embattled PM reshuffles cabinet

Japan's Prime Minister Naoto Kan brought new blood to his cabinet Friday as he tries to appease strident opposition, mend the country's tattered finances, and boost free trade.

Kan's third cabinet sees newcomers take up the fiscal policy, trade, justice and transport portfolios, although other heavyweight positions such as the foreign, finance and defense ministries went unchanged.

These came as it was revealed the prime minister had bowed to pressure from the conservative opposition in order to help secure the passage of bills to finance the 2011 budget, AFP said.

In a speech concerning the "economic doldrums" Japan has faced for the past two decades, Kan threw down the gauntlet for the nation to overcome "huge, critical situations,"

"Japan's fiscal policy will hit a dead end if it is left as it is," Kaoru Yosano, the newly appointed fiscal policy minister, told reporters Friday, according to Reuters.

The 72-year-old conservative former finance minister Yosano is an advocate of raising the 5 percent sales tax to fund bulging social welfare costs.

Japan's public debt is already about twice the size of its $5 trillion economy, Reuters said.

Kan appointed former administrative reform minister Yukio Edano as his new chief cabinet secretary, throwing his former second-in-command Yoshito Sengoku to the wolves, in an effort to gain traction in negotiating with opposition parties.

Opposition parties threatened to boycott parliamentary sessions and delay the passage of key legislation unless Sengoku was removed, citing what was seen as his mishandling of a territorial row with China.

Agencies