TOKYO: Japan's new finance chief pledged Thursday to revive the economy and shake up his powerful ministry, after his predecessor quit due to poor health in a fresh setback to the government.

"I want to help revitalise Japan," Naoto Kan told reporters outside his home, a day after being named by Prime Minister Yukio Hatoyama to take the helm of the world's second largest economy, reeling from its worst slump in decades.

Kan, who will have his hands full as both the finance minister and the deputy prime minister, has criticised the finance ministry as the symbol of old-style politics led by unelected but powerful bureaucrats.

"If I make meaningful changes at the ministry, it would be a model for changing Kasumigaseki (the centre of Japan's bureaucracy) as a whole," he said.

The 63-year-old faces the daunting task of steering Asia's biggest economy out of its worst post-war downturn, while also keeping the soaring national debt under control in the face of growing global concerns about sovereign debt. Related article: Yen steady with eyes on new finance minister

"Unless Kan shows a strong leadership to organize growth strategies ... Japan's economy will not be able to get out of the trap of deflation and mounting government debt," said JP Morgan economist Masaaki Kanno.

Hatoyama said Thursday that Kan's appointment "was the best conclusion" because his deputy prime minister had been involved in drafting the budget.

Fujii, who was seen as a proponent of fiscal discipline, was hospitalised on December 28 suffering from fatigue and high blood pressure after months of wrangling over the national budget.

A veteran politician, he was picked by Hatoyama as finance minister less than four months ago, returning to a post he held briefly in the early 1990s.

Fujii was one of the few cabinet members with previous government experience and his departure is setback to Hatoyama's efforts to fix the economy.

His departure has weighed on the yen as traders bet that Kan will be less tolerant of a stronger currency than his predecessor.

Fujii has repeatedly said that in principle Tokyo should refrain from market intervention to weaken the yen and protect exporters.

"Compared to his predecessor, who had tolerated a higher yen, Kan has said that he wanted to avoid a strong currency," said Hideaki Inoue, chief forex manager at Mitsubishi UFJ Trust and Banking Corp.