Following a cabinet reshuffle Tuesday that retained familiar faces, Prime Minister Shinzo Abe is set to tackle a host of diplomatic challenges Japan faces with neighboring countries from North Korea and Russia to China.
Japan will face difficult negotiations with the United States, its longtime ally, for a bilateral trade agreement, as Abe reached agreement last week with President Donald Trump. Abe needs to address growing concern at home about the prospect of the U.S. demand for a tariff cut on beef.
On the economic front, Abe's task is to keep the growth momentum going so Japan can raise its sales tax in October 2019, a prerequisite for realizing what the prime minister has described as a "social security system that benefits all generations."
The Japanese prime minister retained key ministers for diplomatic and economic challenges including Deputy Prime Minister Taro Aso, who doubles as finance minister, Foreign Minister Taro Kono and economic revitalization minister Toshimitsu Motegi.
Abe is expected to see early passage in an extraordinary Diet session this fall of a supplementary budget for the current fiscal year aimed at funding reconstruction efforts in areas hit by natural disasters.
The new cabinet will make preparations for Emperor Akihito's abdication in April and the succession to the throne of his son, Crown Prince Naruhito. Japan will host a series of high-level meetings under its G-20 presidency next year, with a summit planned for June in Osaka.
Abe, who secured another three-year term as head of the ruling Liberal Democratic Party in September, has said he will settle diplomatic issues left unresolved since the end of World War II.
North Korea is a top priority for Abe. As the Japanese premier has built a close relationship with Trump, he is expected to ask him to push for the resolution of the abduction issue when the U.S. president meets with North Korean leader Kim Jong Un for a second time.
Abe is now willing to engage in direct talks with Kim, who also reportedly wants to do so at an "appropriate time," although the prime minister maintains that any summit should yield progress on the long-standing issue of Japanese nationals abducted by North Korea in the 1970s and 1980s.
"I'm determined to consolidate all efforts within the Cabinet to resolve the most important issue of past abductions at an early date," Abe said at a press conference following the cabinet reshuffle. Chief Cabinet Secretary Yoshihide Suga will be in charge of the abduction issue.
Another legacy is Japan's long-standing territorial issue with Russia. Abe will likely hold talks later this year with Russian President Vladimir Putin, who abruptly called for signing a peace treaty "without preconditions," possibly on the sidelines of international gatherings in November and December.
In another important diplomatic event, Abe is expected to make an official visit to China in late October for a summit with Chinese President Xi Jinping, in a sign of thawing ties that have been frayed over wartime history and territory.
After more than five years of trying to declare an end to deflation, the goal has yet to be attained. His "Abenomics" policy mix that entails bold monetary easing by the Bank of Japan will undergo a critical test amid growing concern about the byproducts of such an unorthodox method.
Uncertainty remains over whether the economy can maintain the current growth momentum at a time of increasing concern about trade friction and whether Japan can raise its sales tax next year from 8 percent to 10 percent, as planned.
To cope with the "national crisis" of the country's aging with a declining birthrate, Abe also plans to rework the employment system so people aged 65 and older can continue working beyond their retirement age.