Japan’s Premier Is Reelected by Lawmakers, Picks New Cabinet

The Japanese parliament voted Tuesday to let Prime Minister Yoshiro Mori keep his post, ensuring the continuation of his party’s public-spending policies to turn around the economy.

Mori appointed a new Cabinet later in the day but kept three key ministers in place--foreign affairs, finance and economic planning--in a move that appeared aimed at maintaining political stability as Japan resuscitates its economy.

There was good news Tuesday on the economic front. Japan’s central bank said business confidence at major manufacturing companies had improved for the sixth consecutive quarter, in another sign that the country is pulling out of its slump. The improvement could pave the way for the first interest-rate increase in Japan in a decade.

Finance Minister Kiichi Miyazawa expressed optimism but urged continued vigilance.

“We must carefully watch employment and consumer spending,” Miyazawa said. “I’m hoping for a shift by this autumn from a recovery led by public spending to one driven by private demand.”

Japan’s economy grew 0.5% in the last fiscal year, which ended in March, after two consecutive years of contraction.

With Mori at the helm, few changes are expected in Japan’s policies while the nation struggles to jump-start its ailing economy.

Mori’s party lost seats in last month’s lower house elections. Although it no longer controls a majority, it still rules in a coalition with two other parties.

In Tuesday’s vote in parliament’s lower house, Mori received 284 of 479 votes, while Yukio Hatoyama, head of the main opposition Democratic Party of Japan, came in second with 130 votes.

Mori took office in April after his predecessor, Keizo Obuchi, suffered a stroke. He has promised to carry on the policies of public spending instituted by Obuchi, who died in May.

There is widespread speculation that Mori will have trouble hanging on to his job in the months ahead, especially after a July 21-23 Group of 8 summit of rich nations and Russia, to be held in Okinawa.