(Agencies)
Updated: 2007-09-14 10:59

TOKYO -- Momentum was building in Japan's ruling party on Friday to tap 71-year-old lawmaker Yasuo Fukuda, known for his pro-Asian diplomacy, as successor to Prime Minister Shinzo Abe after his shock resignation, media and analysts said.

Former chief cabinet secretary Yasuo Fukuda attends the ruling Liberal Democratic Party parliamentarian meeting at the party headquarters in Tokyo September 13, 2007. [Reuters]

Fukuda, a former chief cabinet minister, was expected to announce his candidacy for Liberal Democratic Party (LDP) president -- and hence prime minister -- later in the day, Japanese media said. The party poll will be held on September 23.

Finance Minister Fukushiro Nukaga, 63, was the first to declare he would run. However, on Friday he told reporters that he would meet Fukuda, fanning speculation he might pull out.

That put the focus clearly on an expected battle between Fukuda and LDP Secretary-General Taro Aso, 66, a close Abe ally. Fukuda said the day before that he was considering running but hadn't made a final decision. "I might draw the short straw," a smiling Fukuda told TV cameras amid reports that key LDP factions were throwing their weight behind him.

Abe's year in power was marred by scandals among cabinet members and a humiliating July election defeat which cost his ruling coalition its majority in parliament's upper house.

But his shock decision to step down stirred fears of delay of decisions on vital policies such as tax and fiscal reform.

Whoever succeeds Abe will face a potential deadlock in a divided parliament. "This next (LDP) leader will be a sort of caretaker until the next general election," said Hidenori Suezawa, a chief government bond strategist at Daiwa SMBC.

"He won't put forth drastic policies and they wouldn't pass anyway."

The winner of the LDP presidential race is assured the premiership by virtue of the LDP-led coalition's huge majority in the lower house of parliament, which picks the prime minister.

Party Dynamics

Aso, a former foreign minister who shares much of Abe's conservative agenda to boost Japan's global security profile and restore traditional values, had been seen as frontrunner to succeed Abe when he stepped down.

Known as a fan of 'manga' comic books and for his ability to work a crowd, Aso had been thought best placed among possible candidates to win popular support.

But his closeness to Abe and his record for gaffes have raised doubts about his suitability for the post, analysts said.

Despite media reports that Fukuda was in the lead, some cautioned the outcome was still uncertain.

"Fukuda looks like an old LDP politician," said Koichi Nakano, a Sophia University political science professor. "I think the LDP is basically panicking and trying to find someone acceptable to everyone, but there is a world outside the LDP."

Fukuda might be able to rally LDP factions, but some analysts questioned whether he could help the party avoid a bashing in the next election for parliament's lower house.

No lower house poll need be held until 2009 but a deadlock in parliament could well prompt one sooner.

Fukuda played a pivotal role as top government spokesman early in the reign of Abe's predecessor, Junichiro Koizumi, expanding his brief into diplomacy and security and earning the nickname "shadow foreign minister."

He resigned in 2004 after admitting he had skipped some payments into the public pension scheme, though some analysts attributed his abrupt departure to growing friction with Koizumi.