The departure of Hirohisa Fujii, 77, one of the few experienced members in the Democratic Party-led administration, was another blow to Prime Minister Yukio Hatoyama as he struggles with falling ratings ahead of a mid-year election.
It could also put at risk the fiscal restraint Fujii had championed, potentially pushing up government bond yields which hit seven-week highs on Wednesday.
Hatoyama told reporters he had selected Kan -- who has headed a newly created National Strategy Bureau that sets priorities for fiscal policy -- to replace Fujii. Yoshito Sengoku, now administrative reform minister, will take on Kan’s previous portfolio as national strategy minister.
Kan is unlikely to favor big spending, given that public debt is nearly 200 percent of GDP, but he is less experienced in budgetary matters and it remains to be seen whether he can resist pressure to spend more if the economy sags again after emerging from a deep recession.
