Japanese lawmakers choose new leader

Japan's ruling party picked former finance minister Naoto Kan, an outspoken politician with activist roots, as its new chief Friday, virtually assuring that he will become the country's next prime minister.

Kan, 63, would succeed the unpopular Yukio Hatoyama, who stepped down two days earlier amid plunging approval ratings over broken campaign promises and a political funding scandal.

Because the Democratic Party of Japan controls the more powerful lower house of parliament, Kan was virtually certain to be chosen as prime minister by lawmakers later in the day.

Kan defeated little-known Shinji Tarutoko, chair of the lower house environmental committee, by a vote of 291-129, with two invalid ballots.

Hatoyama's cabinet resigned en masse Friday morning, clearing the way forthe vote to select the party's new chief.

As prime minister, Kan will face daunting choices in how to lead the world's second-largest economy, which is burdened with massive public debt, sluggish growth and an aging, shrinking population. He must also rally voter support ahead of upper house elections that are due next month.

Kan told fellow party members ahead of the vote that they need to deal with "money politics" and come clean.

"I will do my utmost, taking up the baton from Prime Minister Hatoyama," he said in his speech. "Our first priority is to regain the trust of the people."

On foreign policy, he described Japan's relationship with the U.S. as the cornerstone of Japanese diplomacy but stressed the importance of ties with regional neighbours.

"With the U.S.-Japan alliance the cornerstone of our diplomacy, we must also work for the prosperity of the Asian region," he said.

In a written candidate's statement Friday, Kan identified economic recovery and growth as Japan's biggest challenge. Japan is the slowest-growing economy in Asia, and will almost certainly be overtaken in size by China sometime this year.

While exports and factory output are rising, unemployment and deflation are worsening.

He pledged to resume fiscal reforms and work toward sustainable finances, including possible tax hikes, to ensure a strong social security system for Japan's aging population. Addressing concerns about financial scandals, he vowed to keep politics clean and tighten campaign financing laws.