Japan PM names new ministers and abandons party revamp

TOKYO (Reuters) - Unpopular Japanese Prime Minister Taro Aso abandoned on Wednesday a revamp of his top party line-up in the face of opposition from party heavyweights, managing only to name two new cabinet ministers ahead of a tough election.

Aso, whose ruling Liberal Democratic Party (LDP) is in danger of losing the election that must be held by October, was considering announcing plans to dissolve the lower house of parliament for an August poll, Japanese newspapers said.

Polls have shown the main opposition Democratic Party in the lead, boosting chances of an end to more than five decades of almost unbroken rule by the conservative LDP and resolution of a political deadlock that has stymied polices as Japan struggles with recession.

Aso relieved Finance Minister Kaoru Yosano of one of his three key posts, handing the economics portfolio to policy expert and former defence minister Yoshimasa Hayashi.

He also named a new head for the National Public Safety Administration, but analysts said the changes would make little difference in either policy or politics.

"It's too little, too late. It's very unlikely that this is going to save public approval for this administration," said Naomi Fink, Japan macro strategist at the Bank of Tokyo-Mitsubishi UFJ.

DAMAGED CLOUT, AUGUST POLL

Aso publicly denied he had planned a party executive revamp, but LDP lawmakers had openly opposed more substantial changes to refresh the leadership line-up ahead of the election.

Yoshitaka Murata, the LDP's deputy head of parliamentary affairs, had told reporters he was against a personnel change, and that aides to Aso were leading the prime minister astray.

"I wish they would stop giving him advice. I want them to be quiet," Murata said.

Analysts say Aso, whose ratings have sunk below 20 percent in some polls, had hoped to boost his standing with voters by appointing telegenic lawmakers to key party posts and clear the way for an election before moves to oust him gather steam.

Aso might make public his plan to dissolve the lower house right before or during a July 8-10 Group of Eight summit in Italy to avoid having his hands tied by potentially poor results in a July 12 Tokyo Metropolitan Assembly election, media said.

Aso's LDP critics are opposed to rushing into a vote that some forecast could see the party lose almost half of its 303 seats in the 480-member lower house.

But some analysts said he could well go ahead.

"His clout has been damaged again since he couldn't change the party line-up, but the LDP has no real choice but to stick with him," said Keio University professor Yasunori Sone.

"I think he will call an election for August after the Tokyo election," Sone said. "If not, moves to oust him could grow."

Yosano had taken on the finance and financial services portfolios, adding to his economics minister post when Aso ally Shoichi Nakagawa quit in February after being forced to deny he was drunk at a G7 news conference.

Speculation had been simmering that the prime minister might tap Hideo Higashikokubaru, a popular comedian-turned-governor with national political ambitions, for a cabinet post but Higashikokubaru said on a TV show he had received no such offer.

(Additional reporting by Isabel Reynolds and Charlotte Cooper; Editing by Rodney Joyce and Bill Tarrant)