TOKYO: Japan's incoming prime minister Tuesday hailed a new "dawn" as he finalised the cabinet line-up tasked with reviving the world's second largest economy and reshaping its foreign policy.

Yukio Hatoyama, head of the centre-left Democratic Party of Japan (DPJ), is set to take over in the top job on Wednesday, two-and-a-half weeks after his party's stunning election victory changed the country's political landscape.

Campaigning on a promise of reform and change, Hatoyama ousted unpopular Prime Minister Taro Aso and his conservative Liberal Democratic Party (LDP), which has ruled Japan almost continuously for more than half a century.

"Tomorrow will be the dawn of Japan's new politics, which I want to build together with you," Hatoyama told party elders meeting to put the finishing touches to the cabinet charged with pushing an ambitious reform agenda.

"I would like to stand in the frontline of this," said the 62-year-old political blueblood, a US-trained engineering scholar who defected from the LDP and co-founded the core of the untested DPJ 13 years ago.

The key finance post will likely go to veteran Hirohisa Fujii, 77, who briefly held the position in the early 1990s, when he left the LDP to join a short-lived coalition government, the Nikkei daily and Jiji Press said.

Fujii, who worked for more than two decades as a finance ministry official, will be tasked with lifting Asia's biggest economy out of its deepest slump since World War II and reducing record-high unemployment.

He has been vocal in attacking the outgoing government's stimulus package, vowing to redirect what his party says is wasteful spending.

He has also said that in principle the government should refrain from intervening in the currency market to curb the strength of the yen and protect the country's exporters, who have been battered by the global downturn.

"I think it's a wrong policy for a nation to just weaken its currency to boost its exports," he told Dow Jones Newswires Monday.

The next foreign minister looks set to be Katsuya Okada, 56, a former DPJ leader and one-time trade ministry bureaucrat, known for his deep policy knowledge and his straight-laced "Mr Clean" image.

One of his jobs will be to help maintain Japan's strong US alliance, despite signals Japan may scale down some military ties, while pushing the DPJ's goal of forging closer links with Asia, especially growing giant China.

He will likely join Hatoyama for next week's UN General Assembly, an international meeting on climate change and a G20 summit in Pittsburgh on reviving the global economy.

After criticising "US-led globalism" in a recent essay and seeking a "more equal" relationship with the United States, Hatoyama will seek to reassure US President Barack Obama that Japan remains a key ally.