Yoshihiko Noda became Japan's sixth new Prime Minister in five years on Tuesday, starting a term in which he must push quake recovery, contain a nuclear crisis and revive the economy.

His unpopular predecessor Naoto Kan, in office just 15 months, and his cabinet resigned in the morning, making way for Noda, the former finance minister, who was elected as premier by the lower house of the Diet.

Noda, 54 - who on Monday beat four rivals in the ruling centre-left Democratic Party of Japan (DPJ) ballot to become its new president - is expected to pick his ministerial lineup and party seniors in coming days.

In a display of humility, Noda on Monday stressed that he is an ordinary man without star power or looks and promised a moderate leadership style that seeks to unite the deeply divided party and engage the conservative opposition.

He has said he is open to the idea of a grand coalition with the main opposition group, the Liberal Democratic Party, who were ousted in a landslide two years ago but who can obstruct and block bills in the upper house.

Noda inherits a set of pressing long-term challenges.

As finance minister since June last year, the fiscal conservative has steered the world's third-largest economy as it suffered the blows of the global financial crisis and Japan's March 11 triple calamity.

Faced with terrible public finances, he has promoted raising taxes rather than borrowing to pay for quake and nuclear disaster relief, and to reduce a public debt that has ballooned to twice the size of the economy.

Noda has also battled to bring down Japan's strong yen, which has soared to post-war highs as a safe haven currency amid global market turmoil, hurting Japan's exporters and threatening a gradual post-quake recovery.

"We still have problems with the yen's appreciation and with deflation," Noda told reporters Tuesday. "On the topic of fiscal discipline, we need to carry out careful management of the economy and public finances."

On the question of nuclear power, which his predecessor Kan wanted to phase out following the Fukushima disaster, Noda has said that currently shut-down reactors should be restarted once they are deemed safe.

On the foreign policy front, like most of his political peers in Japan, Noda has stated his support for a strong US security alliance and has voiced concern about China's rising military spending and naval assertiveness.

Noda angered Japan's neighbours, especially South Korea, when he said that Japan's World War II leaders convicted by the allied tribunal were not war criminals.

On Tuesday Noda, who has stressed the economic interdependence of the region's nations, said he wants "win-win relations" with South Korea and China.

Japan's revolving-door leadership, due in part to bitter factional infighting and a busy electoral calendar, is widely seen as muddying the DPJ's policy goals and weakening the country's position on the world stage.

Kan's anti-nuclear stance tapped into broader public sentiment, but his leadership style otherwise disappointed the electorate. His support ratings plunged from a one-time high of about 65 percent to 15 percent.

Newspapers Tuesday warned of the tough task ahead for Noda, the first DPJ premier who is not from the party's founding generation.

The Asahi Shimbun said: "Mr. Noda must handle a mountain of tough issues such as disaster recovery, handling the nuclear accident, taking steps on the rise of the yen, on deflation and on rebuilding diplomacy.

"Two years ago exactly today, general elections marking a historic power change took place," it said, referring to the DPJ's win on a promise of politics centred on people, not the interests of bureaucrats and companies.

Since then, the DPJ has floundered, plagued by factional power plays and the political funding scandals of two of its founding figures, the first DPJ premier Yukio Hatoyama and the controversial faction boss Ichiro Ozawa.

"The third prime minister of the DPJ... is at a crossroads on whether Japan can stabilise its politics with this power change," said the Asahi.