Prime Minister Taro Aso's Cabinet suffered a serious blow Sunday with the resignation of transport minister Nariaki Nakayama, who was under fire for several gaffes, including saying Japan is "ethnically homogenous."

Aso appointed former administrative reform minister Kazuyoshi Kaneko, 65, to succeed Nakayama.

Kaneko, a seven-term representative from the Gifu No. 4 district, served as state minister in charge of administrative reform from 2003 to 2004 under Junichiro Koizumi.