August 3, 2017 / 4:46 AM / 2 months ago

Japan PM names safe hands in cabinet reshuffle but makes maverick top diplomat

Japan's Prime Minister Shinzo Abe attends a news conference after reshuffling his cabinet, at his official residence in Tokyo, Japan, August 3, 2017. REUTERS/Kim Kyung-hoon

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe, beset by scandals and falling support, opted for safe hands over fresh faces in a cabinet reshuffle on Thursday but the changes may not boost his support to the extent he seeks.

Many ministers are being reappointed, such as Finance Minister Taro Aso, or are taking up posts they have held before, some in Abe’s first 2012 cabinet.

One exception is new Foreign Minister Taro Kono, known for his willingness to criticize the ruling party and a frankness unusual for a Japanese politician.

Abe also appointed longtime ruling party policy veteran Toshimitsu Motegi as new economy minister overseeing structural reforms, which are part of the premier’s “Abenomics” stimulus policies aimed at reviving the stagnant economy.

(For a graphic on Japan's Cabinet reshuffle, click tmsnrt.rs/2eSMmzS)

“The economy remains our top priority,” Abe told a news conference after the reshuffle, apologizing for the scandals he described as having harmed public trust in his policy handling.

“We’ll seek to end deflation by accelerating a virtuous economic cycle.”

Motegi lauded the achievements of Abenomics but said more had to be done, especially to raise the potential growth rate.

“We will focus on improving the level of skills in the work force and make investments in the seeds of future growth,” he told a news conference.

Opinion polls show support for Abe has plunged to its lowest since he returned to office in December 2012 with a promise to revive Japan’s stale economy and bolster its defenses, endangering his goal of revising the pacifist constitution.

Abe had until recently also been seen as likely to win a third term as head of his ruling Liberal Democratic Party (LDP) and thus the premiership, putting him on track to be Japan’s longest-serving prime minister.

But support in recent polls has fallen below 30 percent, with the opposition fanning suspicions of Abe’s favoritism to a friend and voters believing that he and his aides have grown arrogant in office. He was also hurt by the LDP’s defeat by a novice political party in a July assembly election.

The market appraisal of the reshuffle was lukewarm.

“Interpreting it positively, he’s re-assembled his first cabinet with hands-on people prioritizing economic revival,” said Hiroyuki Fukunaga, chief executive at Investrust. “But it also seems as if we’ve returned to that time.”

“HUGE ASSET”

New Foreign Minister Kono, a former administrative reform minister, has a degree from Georgetown University in Washington and worked as an aide for several U.S. politicians.

“In the current state of confusion and flip-flop in Washington, Kono’s deep and broad network of personal connections will be a huge asset,” Jesper Koll, head of equity fund WisdomTree Japan, said in an email.

One of Kono’s major tasks will be to coordinate closely with the United States, Japan’s closest ally, in the face of North Korea’s missile and nuclear development programs.

“As a result of these issues, which have worsened the security environment surrounding Japan, we will have to strengthen our relationship with the United States more than ever before,” he told a news conference.

Besides Aso, Trade Minister Hiroshige Seko and Chief Cabinet Secretary Yoshihide Suga, who has drawn criticism as the face of a cabinet that many voters feel came to take them for granted, will remain in their posts.

Internal Affairs Minister Seiko Noda, often spoken of as a possible future female premier, may have been added in an attempt to woo women voters, who are less enthused by the Abe government than men.

Despite Abe’s promises to create a society “where women can shine,” the cabinet now has only two women, down from three in the last and five in one of his previous cabinets - a sign of how far women still have to go in the LDP, said Misako Iwamoto, a women’s studies professor at Mie University.

Reporting by Leika Kihara, Elaine Lies, Ami Miyazaki and Ayai Tomisawa,; Writing by Elaine Lies and Leika Kihara; Editing by Paul Tait and Matthew Mpoke Bigg

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