The new finance minister Koriki Jojima is expected to adopt Noda's policy of the pushing for more fiscal reforms as the world's third largest economy teeters on the brink of recession, with mounting sovereign debt and funding needed to care for Japan's ageing population.

Noda kept his foreign and defense ministers, Koichiro Gemba and Satoshi Morimoto, ensuring continuity as Japan argues with China over a group of islands in the East China Sea.

New to the cabinet is Education Minister Makiko Tanaka, a woman politician with pro-Beijing credentials.

Cross-party vote clinches tax hike

In June, Noda prevailed on the plan to raise sales tax to 10 percent by 2015. He elicited backing in parliament from members of the opposition Liberal Democratic Party (LDP), but his tactic prompted a sizeable rebellion with his own Democratic Party of Japan (DPJ).

Former DPJ leader Ichiro Ozawa and dozens of party lawmakers subsequently left the ruling camp in July. The government did, however, retain a majority in the lower house. The defectors also cited public disquiet over the restarts of two nuclear reactors after the 2011 Fukushima disaster.

Last week, Noda was re-elected as the DPJ's party leader in an attempt to further shore up support. He has promised an election "soon."

The party came to power in 2009, ending five decades of almost unbroken rule by the Liberal Democratic Party (LDP), and heads a coalition with smaller parties.

The conservative LDP, in a similar move last week, picked former premier and security hawk Shinzo Abe as its new leader, giving him another shot at the premiership.

Opinion surveys indicate that the LDP would come first in a parliamentary election.

ipj/rg (dpa, Reuters, AFP)