TOKYO Japan's new Prime Minister Naoto Kan is wading into a sea of challenges — rebuilding shattered trust in his party just before elections, slashing a debt mountain and mending ties with Washington.

The problems that derailed his predecessor Yukio Hatoyama just nine months after a massive election win haven't gone away, although analysts expect the pragmatist Kan to tackle them better than the professorial Hatoyama did.

When Hatoyama tearfully announced his resignation on Wednesday, he blamed his bungled handling of a dispute over an unpopular US airbase on the southern island of Okinawa, as well as political funding scandals in his party.

The double-resignation of Hatoyama and the Democratic Party of Japan's shadowy powerbroker, secretary general Ichiro Ozawa, was meant to signal a fresh start for the centre-left party.

Kan's task will be to persuade jaded voters to again believe in the promises the DPJ offered last August, when its message of change swept aside half a century of almost unbroken conservative rule.

But facing upper house elections, expected on July 11, Kan carries some political baggage as a former top figure of the Hatoyama cabinet, said Hideo Otake, politics professor emeritus at Kyoto University.

“Yet the bad image regarding the political funding scandals has been removed with the resignations of both Hatoyama and Ozawa,” Otake said. Aides to both men have been indicted for cooking the books.

In an early poll bounce for the DPJ after Hatoyama quit Wednesday, the party's approval ratings crept up to 27 per cent in a survey released on Friday.

The poll by the Asahi Shimbun daily indicated that backing for the opposition Liberal Democratic Party, the conservative force that long ruled Japan, stood at just 16 per cent.

“Public and media support may temporarily rebound as has been the case with previous new governments,” politics professor Hiroshi Hirano of Tokyo's Gakushuin University said.

“The key to Kan's government is whether the new cabinet can achieve something tangible during the remaining one month ahead of the upper house elections... Surely it will be a tough battle for the DPJ.” The most tricky issue that brought down Hatoyama still lingers — angry opposition to an agreement with the United States to relocate an unpopular US airbase within the southern island of Okinawa.

Hatoyama's downfall came when he backtracked on an election promise to move the base off Okinawa, a backflip that sparked outrage on Okinawa and led a pacifist party to desert the DPJ's ruling coalition last weekend.

Hirano said “After watching Hatoyama's failure in pursuing his idealism on the Futenma issue, Kan, who originally may have had idealistic zeal as a politician, will probably take a pragmatic approach.” The outgoing finance minister will also face a tough challenge in seeking to revitalise an economy that has been stuck in the doldrums for two decades, and is set to be overtaken as the world's number two by China this year.

The DPJ last year made costly promises to turn Japan into a more “fraternal” society -- but Kan has pointed with alarm at the country's public debt mountain, which is nearing 200 percent of gross domestic product.

“Kan will have to adjust the DPJ's campaign pledges to more realistic ones, for example by reviewing cash handouts to households with children,” said Mitsubishi Research Institute economist Yoko Takeda.

“Kan is seen as a budget hawk and expected to work toward reducing the fiscal debt,” she said.

“Japan can't afford a political vacuum, considering the volatile international financial markets,” Takeda added, pointing to China's rise and Greece's debt crisis.—AFP