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Finance minister faces tough policy decisions after winning race to succeed Naoto Kan as leader of governing party Yoshihiko Noda, Japan’s finance minister, is almost certain to become the country’s seventh prime minister in six years on Tuesday after winning the race to succeed Naoto Kan as leader of the governing party. A nationally televised vote involving nearly 400 MPs from the Democratic party of Japan (DPJ) was held on Monday after Kan honoured a promise to step down last Friday following the passage of key bills to fund post-tsunami reconstruction and support renewable energy. Noda was declared the winner after defeating his nearest rival, the trade minister, Banri Kaieda, by 215 votes to 177 in a runoff held after none of the original five candidates won more than 50% of votes in the first round. Noda, 54, will be faced with a long list of policy headaches once the DPJ has used its majority in the lower house on Tuesday to formally elect him prime minister. The nuclear crisis is far from being resolved and tens of thousands of people living along the devastated north-east coast have yet to be permanently rehoused. Japan has so far failed to stem the rise of the yen or agree on how to fund soaring health and social security costs in one of the world’s fastest-ageing societies. Noda’s victory raised the prospect of a tax increase to pay for reconstruction from the earthquake and tsunami, which is projected to cost almost 20tn yen over five years. “Let’s do the utmost to tackle what we have promised and if there’s not enough money, we might ask the people to share the burden,” Noda, a fiscal conservative, said before the vote in a reference to future tax rises. He also inherits an economy that has shrunk for three quarters in a row, and is saddled with a national debt twice the size of Japan’s US $5tn economy, the highest in the industrial world. Last week, Moody’s Investor Service cut Japan’s credit rating, citing the country’s formidable debt, political instability and the absence of credible plan to revive the world’s third-largest economy. Many voters, particularly those affected by the 11 March tsunami and resulting nuclear crisis, see the vote as a self-indulgent power play carried out at a time of national crisis. The leadership election quickly became a struggle between rival groups in the DPJ after the party’s most powerful faction leader, Ichiro Ozawa, refused to support the early favourite, the former foreign minister Seiji Maehara. Ozawa, who has been suspended from the party pending an investigation into a funding scandal, effectively ended Maehara’s chances when he decided to back Kaieda. The prospects for Noda’s political longevity are not bright. He commanded scant support among the public going into the vote, and must quickly orchestrate a working relationship with opposition parties, which can block legislation through their control of the upper house. Political precedent is also working against him: his five predecessors have all been forced out of office after about a year. Noda made much of his humble upbringing in Chiba, near Tokyo, and even managed to inject humour into the proceedings when he likened himself to a loach, an unattractive, bottom-feeding freshwater fish. “I know I look like one so if I become prime minister, we can’t expect an immediate rise in our support rate, so I would not call a snap election,” he said. “But a loach has its own qualities, even though it can’t do as a goldfish does.” Although polls indicate widespread public support for Kan’s nuclear phase-out, criticism of his handling of the immediate aftermath of the nuclear accident and the reconstruction effort has sent his approval ratings to below 20% in recent days. Noda supports the phase-out, but wants existing reactors to be checked quickly and restarted to avoid a power shortage. Like Kan, he has floated the idea of a grand coalition that would involve appointing opposition politicians to cabinet posts – although other parties have given the idea a lukewarm response. Kan had survived a no-confidence vote in June by promising to step down once parliament had passed three laws instrumental to the rebuilding effort and the promotion of renewable energy. The last two pieces of legislation were passed last Friday. Analysts described Noda as the preferred candidate among investors given his preference for higher taxes over more borrowing. “Of the five candidates, Noda was the best choice for Japan’s economy,” Takuji Okubo, chief economist at Societe Generale Securities in Tokyo,” told Reuters. “If Noda had lost, it could have led to speculation of a vacuum in Japan’s currency market intervention, but Noda is likely to keep trying to tame the yen’s appreciation.” Japan Justin McCurry guardian.co.uk