(For more on Japan's new government click ID:nPOLJP])
TOKYO, Sept 15 (Reuters) - Japan's next prime minister Yukio Hatoyama has decided to tap veteran lawmaker Hirohisa Fujii as finance minister in his incoming government, Japanese business daily Nikkei reported on Tuesday.
Hatoyama, the leader of the Democratic Party, will take office on Wednesday following his party's huge win in an Aug. 30 election over the Liberal Democratic Party (LDP), bringing to power a government that pledges to put more money in the hands of consumers, cut waste and reduce bureaucrats' control over policy-making.
Fujii, who served as finance minister in an anti-LDP coalition from 1993-1994, has been widely tipped by Japanese media as likely to take the post.
Known as a fiscal conservative, he would be welcomed by markets concerned about ballooning public debt as Japan struggles out of recession.
His caution over intervening in currency markets and his backing for ultra-loose monetary policy means he is seen as a technocrat who is unlikely to rock markets. [ID:nT228579]
Hatoyama said he would begin choosing ministers on Tuesday after a meeting of all the party's lawmakers.
Nikkei, without citing sources, said the incoming prime minister decided to pick Fujii after meeting with his party's powerful former leader, Ichiro Ozawa, on Monday.
The Yomiuri newspaper had a similar report, saying Hatoyama was likely to appoint Fujii to head the Finance Ministry, generally seen as one of the country's most powerful ministries that oversees currency and fiscal policy. [ID:nSP502384]
One newspaper reported last week Fujii might be facing opposition from Ozawa, saying this was a sign Hatoyama might have trouble controlling the party after taking office this week. [ID:nT373564] [ID:nT117581]
Yomiuri, without citing sources, also said the Democratic Party's policy chief Masayuki Naoshima was likely to become the new minister of economy, trade and industry.
That was in contrast to Kyodo news agency, which reported on Monday that Hatoyama may choose Naoshima as finance minister instead of Fujii.
Hatoyama has already said he would tap Naoto Kan, a former health minister, to head a powerful new agency to oversee the budget process and set policy priorities. [ID:nT268428]
The new National Strategy Bureau will be tasked with reforming what the Democrats say is a cumbersome policy-making system that relied heavily on recommendations from bureaucrats and allowed the ruling party to compete with the cabinet on decisions. The new agency will include officials from the public and private sector.
Hatoyama has also said Katsuya Okada would become foreign minister -- a post being closely watched in Washington because of concerns that arose about the U.S.-Japan alliance after his party vowed a more independent diplomatic course. [ID:nT167240]
(Reporting by Yoko Nishikawa, Editing by Chizu Nomiyama)