Veteran politician Kaoru Yosano has been named the new minister for economic and fiscal policy [Reuters]

Japan's prime minister has reshuffled his cabinet in a bid to revive the county's faltering economy and tackle reforms.

Naoto Kan announced the new ministers for fiscal policy, trade, justice and transport on Friday. But he kept other important posts, including foreign, finance and defence, unchanged.

The most notable changes include Kaoru Yosano, a 72-year-old independent fiscal conservative who has advocated raising the five per cent sales tax, and who will become minister for economic and fiscal policy.

Yosano held a number of senior government positions under the former Liberal Democratic Party government, and is viewed as a leader who can foster consensus across party lines.

"Japan's fiscal policy will hit a dead end if it is left as it is," Yosano said.

"I share the prime minister's thinking on the need to reform the public finances and social security."

'Difficult time'

Yukio Edano, the ruling centre-left Democratic Party of Japan's acting secretary-general, will take over as chief cabinet secretary.

"For Japan and the DPJ government, this cabinet reshuffle has come at a particularly difficult time," Edano, who replaces Yoshito Sengoku, said.

"We see a good balance of old and young. This allows each one of us to make the most of ourselves."

Kan's new cabinet, his third since taking office last June, will aim to push for reforms in the face of a string of problems including a rapidly ageing population, growing national debt and a struggling economy.

He has faced criticism from fellow party members that his administration was failing to tackle urgent problems confronting the country.

Source: Agencies