On Wednesday, Japan's parliament elected Shinzo Abe as prime minister, just as the nation faces the challenges of deflation, an aging population and a rising influence of China in the region.
The leader of the center-right Liberal Democratic Party (LDP) returned to power, defeating former Prime Minister Yoshihiko Noda's Democratic Party (DJP) after just three years in office.
The LDP was swept out of office by the DPJ in 2009, ending more than 50 years of nearly uninterrupted rule.
Abe’s promises to revive the economy include an aggressive monetary policy easing by the Bank of Japan, increased fiscal spending to beat deflation and steps to tame the strong yen to boost Japanese exports.
Abe won the support of 328 members of the 480-seat lower house against 57 in favor of DPJ's newly chosen leader Banri Kaieda, the AFP has reported.
"The LDP is still under the critical eyes of the public. We need to earn their trust by getting things done one by one," Abe told the party lawmakers ahead of the lower house vote.
"First on the agenda is economic recovery, beating deflation and correcting a firm yen and getting the economy back on the growth path. If we don't pursue this target, an upper house election next year will be a tough one for us,” he said.
Immediately after Wednesday’s vote, Abe unveiled a cabinet filled with relatively young and unknown faces.
Taro Aso, Former Prime Minister, was named finance minister and also received the financial services portfolio. Former Trade and Industry Minister Akira Amari was appointed minister for economic revival and policy veteran Toshimitsu Motegi was appointed as trade minister. Motegi is expected to handle energy policy, one of the most-debated topics during the election campaign since the aftermath of the Fukushima nuclear disaster. Additionally, Abe’s loyal supporter,Yoshihide Suga, was appointed chief cabinet secretary.
"The economy, diplomacy, education and rebuilding in the northeast (hit by the 2011 tsunami, quake and nuclear disaster) are in a critical situation. I want to create a cabinet which can overcome this crisis," Abe told a news conference Tuesday.
"We have advocated beating deflation, correcting the strong yen and achieving economic growth during the election, so we must restore a strong economy," he said, adding that the stagnant economy was also undermining Japan's diplomatic clout.
Abe is expected to maintain a tough stance in confronting China with regard to an island dispute in the East China Sea and strengthening Tokyo’s relations with Washington.
Amrutha Gayathri is a reporter for the International Business Times, where this report first appeared.