Japan PM to tap rival, put policy stamp on cabinet

By Linda Sieg

TOKYO (Reuters) - Struggling Japanese Prime Minister Yasuo Fukuda tapped a popular rival for a top party post and was tipped to axe his finance and economics ministers in a shake-up on Friday to boost his flagging support among voters.

Fukuda, 72, wants to put his stamp on economic policy and erase doubts about his leadership that threaten his grip on power after just 10 months in office.

But it was unclear how effective the personnel revamp will be, especially after a high-profile delay in making the move that fed perceptions that Fukuda is indecisive.

The prime minister would tap his ruling party No. 2, Bunmei Ibuki, for finance minister, Kyodo news agency said, after drafting former foreign minister Taro Aso, a hawkish veteran and a rival for the leadership, to take on the key party post.

The official cabinet line-up was to be announced after 6 p.m. (0900 GMT), with media reporting that Fukuda would tap veterans with extensive cabinet experience and keep several incumbents.

Fukuda probably wants to draw on the popularity of Aso, a fan of manga comic books, to improve the ruling bloc's chances in a general election that must be held by September 2009 and could well come sooner, analysts said.

The economics portfolio would go to Kaoru Yosano, another veteran who favours raising the national consumption tax to repair Japan's tattered state finances and fund the rising social welfare costs of a rapidly ageing population, Kyodo said.

But Fukuda was set to retain Foreign Minister Masahiko Komura and Chief Cabinet Secretary Nobutaka Machimura, the top government spokesman, Kyodo said.