Japan's Abe taps allies for cabinet, eyes deflation

TOKYO (REUTERS) - New Japanese Prime Minister Shinzo Abe unveiled a cabinet stacked with close allies on Wednesday, kicking off a second administration committed to battling deflation and coping with the challenge of a rising China.

Mr Abe, 58, has promised aggressive monetary easing by the Bank of Japan and big fiscal spending by the debt-laden government to slay deflation and weaken the yen to make Japanese exports more competitive.

The grandson of a former prime minister, Mr Abe has staged a stunning comeback five years after abruptly resigning as premier in the wake of a one-year term troubled partly by scandals in his cabinet and public outrage over lost pension records.

"I want to learn from the experience of my previous administration, including the setbacks, and aim for a stable government," Mr Abe told reporters before parliament's lower house voted him in as Japan's seventh prime minister in six years.