TOKYO • Japanese Prime Minister Shinzo Abe appointed a long-time associate and one-time rival as Economy Minister, replacing the key architect of his Abenomics policies with a politician who has limited experience in economic and trade issues.

Mr Nobuteru Ishihara, 58, has served as secretary-general of the ruling Liberal Democratic Party, as minister for administrative reform and as transport minister, but never in a Cabinet position that forms part of the Council on Economic and Fiscal Policy, the govern-ment's control centre for economic strategy.

The appointment on Thursday came immediately after Mr Akira Amari stepped down in a bid to limit damage to the administration after he faced allegations that he took money in return for political favours.

Mr Abe needs a steady hand on the economic tiller amid stock market losses and growing concern that fallout from the slowdown in China is eroding some of the gains of his Abenomics policies, months before an Upper House election expected in July.

"He has a clean image in terms of money," said Mr Izuru Kato, president of Totan Research in Tokyo, referring to Mr Ishihara. But, compared with Mr Amari, "I have the impression he is lacking in ability".

Mr Amari was Japan's top negotiator on the Trans-Pacific Partnership regional trade deal, which Mr Abe must now seek to ratify in Parliament.

He was a driving force of Abenomics, pushing business-friendly policies such as deregulation in special economic zones.

Mr Ishihara told reporters on Thursday: "The light of Abenomics is at last spreading to the regions and to small and medium-sized enterprises.

"I want to firmly carry out ma-croeconomic policies to back up this trend."

Yesterday, Mr Ishihara said that the Bank of Japan's (BOJ) decision to adopt negative interest rates showed the central bank's strong determination to beat deflation. The BOJ unexpectedly cut a benchmark interest rate to below zero yesterday.

Mr Ishihara ran against Mr Abe in the 2012 race for leadership of the party, but the two were closely associated earlier in their careers.

Along with current Health Minister Yasuhisa Shiozaki and another lawmaker, they formed a group in the late 1990s to work on pensions and social security policy.

As of yesterday, he literally became Mr Abe's right-hand man, according to the Nikkei newspaper, which said Mr Ishihara would take Mr Amari's place to Mr Abe's right during Cabinet meetings.

Mr Ishihara worked as a television reporter before entering politics, but he is probably best known as the son of former Tokyo governor Shintaro Ishihara, who is an outspoken nationalist and apologist for Japan's role in World War II.

Ishihara junior is seen as more moderate in his views than his father.

The elder Ishihara was responsible for ratcheting up China-Japanese tensions in 2012 by raising cash to purchase the uninhabited Senkaku islands, which China claims as the Diaoyu islands, with plans to develop them with the express purpose of reinforcing Japan's sovereignty.

Mr Yoshihiko Noda, prime minister at the time, had the central government purchase them instead, saying Mr Shintaro Ishihara's move could have caused conflict with China. That purchase prompted anti-Japanese protests in China and a plunge in sales by companies such as Toyota Motor.

BLOOMBERG, REUTERS