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Japan’s Abe taps allies for cabinet, pledges deflation fight

Japan's new Prime Minister Shinzo Abe speaks during his first press conference at the prime minister's official residence in Tokyo, Dec. 26, 2012.

Shizuo Kambayashi/AP

New Japanese Prime Minister Shinzo Abe vowed on Wednesday to battle deflation and a strong yen, and bolster ties with the United States as he kicked off a second administration committed to reviving the economy while coping with a rising China.

A hawk on security matters, Mr. Abe, 58, 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.

Critics worry, however, that he will pay too little heed to reforms needed to generate growth despite an ageing, shrinking population and reform a creaking social welfare system.

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The grandson of a former prime minister, Mr. Abe has staged a stunning comeback five years after abruptly resigning as premier in the wake of a one-year term troubled partly by scandals in his cabinet and public outrage over lost pension records.

"With the strength of my entire cabinet, I will implement bold monetary policy, flexible fiscal policy and a growth strategy that encourages private investment, and with these three policy pillars, achieve results," Abe told a news conference after parliament voted him in as Japan's seventh prime minister in six years.

Mr. Abe's long-dominant Liberal Democratic Party (LDP) surged back to power in this month's election, three years after a crushing defeat at the hands of the novice Democratic Party of Japan.

Mr. Abe appointed a cabinet of close allies who share his conservative views in key posts, but leavened the line-up with LDP rivals to provide ballast and fend off criticism of cronyism that dogged his first administration.

Former prime minister Taro Aso, 72, was named finance minister and also received the financial services portfolio.

Ex-trade and industry minister Akira Amari becomes minister for economic revival, heading a new panel tasked with coming up with growth strategies such as deregulation.

Policy veteran Toshimitsu Motegi, as trade minister, will be tasked with formulating energy policy in the aftermath of the Fukushima nuclear disaster last year.

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Loyal Abe backer Yoshihide Suga was appointed chief cabinet secretary, a key post combining the job of top government spokesman with responsibility for co-ordinating among ministries.

Others who share Mr. Abe's agenda to revise the pacifist constitution and rewrite Japan's wartime history with a less apologetic tone were also given posts, including conservative lawmaker Hakubun Shimomura as education minister.

"These are really LDP right-wingers and close friends of Abe," said Sophia University professor Koichi Nakano. "It really doesn't look very fresh at all."

Fiscal hawk Sadakazu Tanigaki, whom Mr. Abe replaced as LDP leader in September, becomes justice minister while two rivals who ran unsuccessfully in that party race - Yoshimasa Hayashi and Nobuteru Ishihara - got the agriculture and environment/nuclear crisis portfolios respectively.

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