Abe's Cabinet Reshuffle Aimed at Boosting Economy; to Repair Japan-China Ties

In a bid to restore the momentum of his "Abenomics" policies, Japan's Prime Minister Shinzo Abe headed for a cabinet reshuffle Wednesday. Also, through the reshuffle, Abe made clear his wish to repair sour ties with China.  

Seeking to build a stronger economy, he appointed a supporter of pro-market reforms as the head of the Government Pension Fund and named a female political leader as the Industry Minister.

Yasuhisa Shiozaki - who is known to back the plan of changing the Government Pension Investment Fund so as to allow it to buy more risky assets, was chosen as the new Health Minister. This change in role puts more power in his hands as he will now be in charge of the world's biggest retirement fund, Bloomberg reports.

According to the Wall Street Journal, the fact that a strict supporter of change in Japan's $1.2 trillion public pension fund was to become the Health Minister lifted stocks Tuesday pushing the yen to a seven-month low against the dollar - to which the investors bet that the fund would be moved toward more forceful investing.

Meanwhile, Yuko Obuchi - whom the monthly magazine Sapio called the "next prime minister-but-one" - will be responsible for Japan's nuclear industry in the Ministry of Economy, Trade and Industry post.

On the other hand, Abe selected two veteran lawmakers who have friendly relations with Beijing to fill key party posts.

The Prime Minister appointed Justice Minister Sadakazu Tanigaki as the secretary-general of the ruling Liberal Democratic Party on Wednesday; hence, removing Shigeru Ishiba - Abe's top political rival - from the party's No. 2 post, Reuters reports.  

Abe appointed Tanigaki, 69, in hope that the experienced lawmaker will help keeping members of the party united and prevent any disturbance to the balance of power between intraparty factions.

Tanigaki has served in many key positions such as that of the LDP president, policy chief, finance minister and Infrastructure Minister.

The second veteran lawmaker - Toshihiro Nikai, 75 - was named the new chairman of the General Council, which is the party's top decision-making body, The Japan Times reports.

"He is sending a strong message to China that he wants to improve ties. Not only Tanigaki but Nikai have good ties with China," political analyst Atsuo Ito told Reuters.