Japan's new PM says his top mission is to save economy, diplomacy from crisis

Japan's Prime Minister Yoshihiko Noda bows as he leaves the prime minister's office in Tokyo, Wednesday, Dec. 26, 2012. Prime Minister Noda's Cabinet resigned Wednesday to clear the way for a vote in parliament to formally install the nation's new leader, Shinzo Abe, a conservative whose nationalist positions have in the past angered Japan's neighbors. (AP Photo/Kyodo News) JAPAN OUT, MANDATORY CREDIT, NO LICENSING IN CHINA, HONG KONG, JAPAN, SOUTH KOREA AND FRANCE

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Japan's newly-named Prime Minsiter Shinzo Abe smiles as he waves at the media upon his arrival at the prime minister's official residence following his election at Parliament in Tokyo today.

TOKYO — Shinzo Abe took office as Japan's seventh prime minister in six years Wednesday and vowed to overcome the deep-rooted economic and diplomatic crises facing his country.

Abe was elected as Japan's leader hours earlier Wednesday, bringing back to power the conservative, pro-business Liberal Democratic Party that governed for most of the post-World War II era. It replaces the liberal-leaning government of the Democratic Party of Japan that lasted three years.

“A strong economy is the source of energy for Japan. Without regaining a strong economy, there is no future for Japan,” Abe told his first news conference after becoming prime minister for the second time.

Calling his administration a “crisis breakthrough Cabinet,” Abe promised to launch bold economic measures to pull Japan out of deflation. He also vowed to step up an alliance with the United States to stabilize Japan's diplomacy shaken by increasing territorial threats from its neighbors.

Abe, whose nationalist positions have in the past angered Japan's neighbors, was also prime minister in 2006-2007 before resigning for health reasons that he says are no longer an issue.

The outspoken and often hawkish leader has promised to restore growth to an economy that has been struggling for 20 years. His new administration also faces souring relations with China and a complex debate over whether resource-poor Japan should wean itself off nuclear energy after last year's earthquake and tsunami caused a meltdown at an atomic power plant.

On top of that, he will have to win over a public that gave his party a lukewarm mandate in elections on Dec. 16, along with keeping at bay a still-powerful opposition in parliament. Though his party and its Buddhist-backed coalition partner is the biggest bloc in the more influential lower house, Abe actually came up short in the first round of voting in the upper house, then won in a runoff.

Capitalizing on voter discontent with the Democratic Party of Japan, Abe has vowed to shore up the economy, deal with a swelling national debt and come up with a fresh recovery plan following last year's tsunami disaster, which set off the worst nuclear crisis since Chernobyl.

Abe promised to launch bold economic measures, and mobile financial steps and strategies to encourage investment.

“We must recover a Japan where hardworking people can feel that there is a better tomorrow,” he said.

Abe is expected to push for a 2 percent inflation target designed to fight deflation. Continually dropping prices deaden economic activity, a situation the Japanese economy has been stuck in for two decades.

Besides generous promises to boost public works spending — by as much as 10 trillion yen ($119 billion), according to party officials — Abe is pressuring the central bank to work more closely with the government to reach the inflation target.

In foreign policy, Abe has stressed his desire to make Japan a bigger player on the world stage, a stance that has resonated with many voters who are concerned that their nation is taking a back seat economically and diplomatically to China.

He has said he will support a reinterpretation of Japan's pacifist postwar constitution to loosen the reins on the military, stand up to Beijing over an ongoing territorial dispute and strengthen Tokyo's security alliance with Washington. Beijing has already warned him to tread carefully, and will be watching closely to see if he tones down his positions now that he is in office.

“Japan's national security faces a clear and present danger,” Abe said, referring to intensifying territorial disputes around the Japanese seas, and renewed his campaign promise to protect the safety of the people of Japan and its territory.

“Japan must strengthen the Japan-U.S. alliance, the cornerstone of Japan's diplomacy,” Abe said.

His new Cabinet features another former prime minister, Taro Aso, as finance minister. Heading the foreign ministry is Fumio Kishida, an expert on the southern island of Okinawa, where many residents upset over crime and overcrowding want a big reduction in the number of U.S. troops they host — now at about 20,000. The new defense minister is Itsunori Onodera, who was in Abe's previous administration.

The LDP governed Japan for decades after it was founded in 1955. Before it was ousted in 2009, the LDP was hobbled by scandals and problems getting key legislation through a divided parliament.