Shinzo Abe, Japan's newly elected prime minister, has announced his new cabinet that includes long-time allies to help him draft an extra budget to spur the nation's flagging economy.
The powerful Lower House of parliament named the 58-year-old as the country's next leader on Wednesday after he led his conservative party to a landslide victory in the general elections earlier this month.
As Japan's seventh prime minister in less than seven years, Abe will replace outgoing prime Minister Yoshihiko Noda whose Democratic Party of Japan suffered a stinging defeat at the polls.
Abe previously served as prime minister from 2006 to 2007.
The losing party, which came to power in 2009, was seen as being punished for policy flip-flops and its clumsy handling of last year's nuclear disaster at Fukushima in the wake of the tsunami.
The LDP and its small ally, the New Komeito party, won a two-thirds majority in the 480-seat lower house in the December 16 election.
As expected, Noda's cabinet resigned on Wednesday morning. Abe responded by naming a cabinet of his hand-picked politcal allies.
Abe won conservative support with nationalistic pronouncements on diplomacy in the midst of a territorial conflict with Beijing over a group of East China Sea islands, saying Japan would stand firm on its claim to the chain.
But he quickly toned down the campaign rhetoric and has said he wants improved ties with China, Japan's biggest trading partner.
Abe called for a solution through what he described as "patient exchanges".
The new leader, whose key campaign platform was reviving the world's third-largest economy, has also said he would look at revising Japan's post-war pacifist constitution, alarming officials in China and South Korea.
Abe has pledged to take bold measures to shore up the economy, deal with a swelling national debt and come up with a recovery plan following last year's devastating earthquake, tsunami and nuclear crises.
“The Liberal Democratic Party has changed,'' he told a news conference on Tuesday. “We are not the party we once were.”
Abe has promised aggressive monetary easing by the Bank of Japan and big fiscal spending by the debt-laden government to slay deflation and weaken the yen to make Japanese exports more competitive.
Hours ahead of the appointment, the Japanese currency yen tumbled against the dollar in currency trade on growing speculation that the Bank of Japan will usher in further easing measures to boost the economy.
Michael Penn, president of the independent Shingetsu News Agency, told Al Jazeera: "He [Shinzo Abe] is not a specialist in economic affairs by any means, in fact it is one of the areas where he left attention during his first premiership, but he does seem to understand very clearly that this is the priority of the Japanese people this time."
"What observers are looking for at this point is whether he is going to pursue the agenda he has outlined for many years or if he is going to take a more pragmatic approach to build better relationships with Asian countries."