PYONGYANG (Kyodo) North Korea will pose a major diplomatic challenge for Yukio Hatoyama when he takes office as prime minister on Wednesday.

Pyongyang will be paying close attention to how Hatoyama handles such issues as the nuclear standoff, the abductions of Japanese nationals and the North's demand for compensation over Japan's colonial rule of the Korean Peninsula.

Hatoyama is expected to coordinate policy on the North's nuclear and missile issues when he meets U.S. President Barack Obama and Chinese President Hu Jintao, possibly later this month in the U.S.