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Prime Minister Naoto Kan launched his third Cabinet on Friday in the hope of making it his “most powerful” for enacting reforms, but questions abound about how effective the new team will be.

In explaining his new picks, Kan told reporters, “I reshuffled the Cabinet with the aim of creating maximum power for overcoming the crisis (facing Japan).”

With a mountain of problems, including an economic slump, financial strains on the social security system, money-tainted politics and a divided Diet, Kan is hoping that removing Upper House-censured Yoshito Sengoku from the equation will help turn the odds in favor of his Democratic Party of Japan and draw more cooperation from the opposition camp.

Sengoku, considered Kan’s right-hand man, was replaced as chief Cabinet secretary Friday by Yukio Edano.

Lawmakers and pundits acknowledged that replacing Sengoku, who was censured last year, merely averted the worst-case scenario — stalled deliberations on legislation.

Most ministers retained their posts, while some were given different posts and assignments in the Cabinet. Overall, the shakeup broke little new ground.

Political analyst Minoru Morita said his impression of the new Cabinet is that it could be “over at any moment” and added that the bomb is ticking for the Kan administration, especially after what he thinks will be almost certain defeat for DPJ candidates in April’s local elections.

Morita said the Cabinet reshuffle points to defeat for the ruling DPJ because the appointment of Kaoru Yosano, who wants to hike the sales tax.

“What the government must do is overcome deflation, but instead it is eyeing a tax hike, which will make the public suffer more and surely cause defeat in the elections,” Morita said.

Kan has been calling for cross-party cooperation to rebuild Japan’s tattered public finances and said he aims to craft a tax reform plan around June.

Mikitaka Masuyama, a professor at the National Graduate Institute for Policy Studies, said the appointment of Yosano reflects the kind of policies Kan wanted to pursue.

“With the new Cabinet, the prime minister issued an appeal to the public that he will work toward fiscal restructuring and the Trans-Pacific Partnership free-trade agreement, but this is a gamble for the DPJ-led administration and could turn out either as a gain or loss, a merit or demerit,” Masuyama said.

Tapping Yosano to reach out to the opposition camp also appears to have backfired.

Sadakazu Tanigaki, leader of the Liberal Democratic Party, was especially critical, dismissing expectations that Yosano can bridge the gap between the LDP, his former party, and the DPJ, and steer it to cross-party talks on fiscal reconstruction.

Another problem for Kan that has undermined public trust is the continuing saga over DPJ bigwig Ichiro Ozawa, who will be indicted, possibly this month, for his alleged involvement in the false reporting of political funds. Kan and his allies have been pressing the kingpin to give unsworn testimony about the allegations before a Diet ethics panel, so far with no success.

Having Edano, a vocal critic of Ozawa, take up the key post of chief Cabinet secretary, Kan maintained the image that his administration was intent on sidelining the party don.

The Kan administration and the DPJ’s executives continue to face a delicate balancing act between making the party’s politics free of money scandals and hurting the feelings of those closest to Ozawa, which could help the opposition block passage of fiscal 2011 budget and related bills that are the centerpiece of the forthcoming Diet session.

Despite his flagging support ratings, Kan has repeatedly said he will remain in power, and his strong resolve is shared by his wife, Nobuko, who last week characterized herself and her husband as “happy-go-lucky.”

How long the couple will be able to remain optimistic and weather growing public discontent remains to be seen.

Nonfiction writer Kaori Kawai said the DPJ brought an end to the decades-long rule of the LDP with a promise to prioritize people’s lives, but its promise had fallen flat.

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