Japan's Ishiba opts for continuity in cabinet picks, eyes snap election

TOKYO (Reuters) - Japan's incoming prime minister, Shigeru Ishiba, signalled continuity this weekend in his early decisions on key posts for his government, suggesting a desire for stability after an unpredictable leadership race.

His picks for finance, defence and foreign minister, as well as the pivotal post of chief cabinet secretary, appear to draw on seasoned veterans from his ruling Liberal Democratic Party, as he prepares to form a government on Tuesday.

Ishiba, 67, won the LDP leadership race on Friday, clinching a run-off win after a contest among an unprecedentedly large field of nine candidates.

In a televised interview on Sunday, Ishiba did not detail his cabinet plans but suggested he was willing to consider a snap election in the near future, perhaps as early as October. An election must be called within the next 13 months.

The Tokyo Shimbun daily later reported that Ishiba would dissolve the lower house of parliament on Oct. 9, with an election set for Oct. 27, citing LDP sources.

For his cabinet, Ishiba is set to name former Chief Cabinet Secretary Katsunobu Kato as finance minister and bring Gen Nakatani back as defence minister, sources told Reuters.

Former Defence Minister Takeshi Iwaya will assume the foreign minister post while Yoshimasa Hayashi will remain as chief cabinet secretary, a key post that includes the role of top government spokesperson, they said.

Ryosei Akazawa, the state minister of finance, will be minister of economic revitalisation.

Ishiba will tap former Prime Minister Yoshihide Suga as vice president of the LDP, sources said, while Japanese media said he would name Shinjiro Koizumi, a rival in the LDP race, as LDP election chief.

In the television interview on Sunday, Ishiba said Japan's monetary policy must remain accommodative as a trend, signalling the need to keep borrowing costs low to underpin a fragile economic recovery.

It was not immediately clear whether Ishiba, who had been a vocal critic of the Bank of Japan's past aggressive monetary easing, was taking a more dovish line with his remarks.

Iwaya, defence chief from 2018 to 2019, helped Ishiba on strategy in his winning run to lead the ruling Liberal Democratic Party.

Former soldier Nakatani, would return to the defence post he held from 2014 to 2016.

(Reporting by Yoshifumi Takemoto, Sakura Murakami and Chang-Ran Kim; Editing by William Mallard and Sharon Singleton)