Japan's economy has been stagnating since the bursting of the economic bubble in the early 1990s. Now it seems to be in the grip of deflation. Its core consumer price fell in April for the 14th straight month. This means Kan has a tough task in hand. He responded to it on Thursday saying he would aim at boosting economic growth and repairing the nation's tattered finances simultaneously. He said he would focus on fiscal discipline because Japan's public debt was inching close to 200 percent of GDP.

Though Kan was finance minister in Hatoyama's Cabinet, it is hard to imagine that he would be able to overhaul the economy.

He has said that he would make great efforts to reduce the burden of Okinawa for housing US military bases. But he has approached the issue more cautiously than his predecessor.

In August 2009, Hatoyama said the US Marine Corps Air Station Futenma should be moved - at least out of Ginowan city in Okinawa. His party promised to reach an agreement with the US before May 2010. Hatoyama thus set too high a target for himself. And after he couldn't keep his promise on Okinawa and lost valuable public support over the DPJ's political fund scandal, he had no option but to resign.

On Sunday, Kan told US President Barack Obama that he would work to fulfil an agreement to relocate an American air base, but reaffirmed that Tokyo's security alliance with Washington remained the "cornerstone" of Japanese foreign policy. Unlike Hatoyama who created an image of one who was challenging the US, Kan is likely to tread more carefully and balance the demands of Japan-US ties with those of Okinawa residents.

Sino-Japan relations, however, are not likely to undergo any primary change under Kan. Kan has said: "Japan needs to build a trusting relationship with the US, though it will put special emphasis on China. I think that is the correct way for Japan's future". This marks a good start to Sino-Japanese relations under Kan, who has also vowed to give shape to Hatoyama's initiative of setting up an East Asian community.

But we can't be too sure about Kan's future. The political fund scandal that forced Hatoyama to resign tainted Kan's political career, too. The past few years have seen several Japanese prime ministers resign. This has cast a shadow over Japanese politics, making people lose confidence in the government. Even the international community doubts whether Japan would see an economic revival soon and achieve diplomatic breakthroughs. Hence, it's very difficult to say what will happen next in Japan's rapidly changing politics.

The author is a professor at the International Strategy Research Center at the Party School of the Central Committee of CPC.