Seiji Maehara has been appointed as the new foreign minister amid tense relations with China [AFP]

Japan's prime minister has named a new cabinet in an effort to strengthen his hand after survivng a leadership challenge last week.

"I have to create a good team," Naoto Kan told reporters before a cabinet meeting at which all his ministers resigned, paving the way for the reshuffle.

Kan appointed new ministers in the ruling Democratic Party of Japan (DPJ) to a range of portfolios - including foreign, justice, trade, education, health, agriculture, tourism and consumer affairs - on Friday as 10 of the 17 posts changed hands.

Katsuya Okada, the foreign minister, was replaced with former transport minister Seiji Maehara, who is considered an expert on security matters and a keen observer on China and its military rise of recent years.

Maehara takes over the post at a sensitive time as Japan and China are embroiled in a heated diplomatic row over the arrest of a Chinese fishing captain.

Beijing has launched a series of diplomatic protests and cancelled official visits to Tokyo over the incident, which took place last week near an East China Sea island chain that is claimed by both sides.

Maehara will also have to work with the United States, Japan's security ally of the post-war era, to settle the details of how  to build a new US airbase on the island of Okinawa, where many locals vehemently oppose it.

In a reshuffle of senior party posts in the DPJ, outgoing foreign minister Okada took over the powerful post of party secretary general.

Financial concerns

Yoshihiko Noda, the finance minster who earlier this week oversaw Japan's first intervention in the currency markets in six years to stem a rise in the yen and protect the export-reliant economy, was retained in the reshuffle.

Kan is attempting to rein in the Asian giant's huge debt but there are worries about Japan's fragile economic recovery could complicate those efforts.

Chief cabinet secretary Yoshito Sengoku, considered the prime minister's "right-hand man" also stayed on, as did defence minister Toshimi Kitazawa, financial services minister Shozaburo Jimi and administrative reform minister Renho.

Ichiro Ozawa, Kan's political rival, who lost in his bid to oust Kan as party president and premier last week, has not been named to any senior posts.

The changes come after a turbulent first year in power following  the DPJ's ouster of the conservative Liberal Democrats in a landslide election, ending their more than 50 years of almost unbroken rule.

Its first premier resigned for mishandling a dispute with Washington over a controversial US airbase, political funds scandals have plagued key members, and the DPJ suffered heavy losses in upper house elections in July.

Source: Agencies