* Japan MOF reshuffle puts Tamaki in charge of yen
* Not expected to make major changes in policy
* Outcome of Japan's general election could affect policy (Recasts, adds comments, background)
TOKYO, July 3 (Reuters) - International policy veteran Rintaro Tamaki, who will become Japan's top currency diplomat in a regular personnel reshuffle at the Finance Ministry, is not expected to make major changes in policy, despite facing a number of thorny issues.
Tamaki, who takes over at a time of volatile financial markets and an economy in its worst recession in recent history, will assume his new post as vice finance minister for international affairs on July 14.
"He's well-known and admired within G8 circles," said John Vail, head of global macro strategy and asset allocation at Nikko Asset Management. "His English is better than most American officials'."
Besides economic turbulence, Tamaki is faced with a global debate on whether the world should decrease its dependence on the dollar as the main international currency, with some emerging economies such as China and Russia calling for the creation of supra-national currency.
Japan has been saying it would be in no one's interests to drastically change the status of the dollar.
Japan has not intervened in foreign exchange markets since 2003 and 2004, when it sold a total of 35 trillion yen ($365 billion) to stem a sharp appreciation in the yen that was seen to be threatening a nascent recovery in the domestic economy.
Its lack of intervention since then is despite the yen's rise to a 13-year high near 87 yen per dollar in January, and many analysts do not expect intervention as long as the yen stays near current levels around 95 yen per dollar.
Making the job more complicated will be the prospect of a victory by the opposition Democratic Party of Japan in a general election that must be held by October but is expected in August.
The Democratic Party, which has said it would increase political appointees to senior ministry posts, is seen as critical of the dollar's dominance in Japan's currency reserves.
A Democratic lawmaker told Reuters in an interview that the dollar's status as the key currency would eventually weaken and Japan should consider asking other countries to issue yen-denominated bonds.
Polls show the Democrats are likely to win the impending general election, ending more than 50 years of almost unbroken rule by the business-friendly Liberal Democratic Party.
Tamaki, who replaces Naoyuki Shinohara, currently heads the ministry's international bureau -- a post usually held before assuming the position of currency tsar.
Katsunori Mikuniya will be appointed head of the nation's financial watchdog, the Financial Services Agency, replacing Takafumi Sato.
In other appointments, Yasutake Tango, currently the head of the ministry's budget bureau, is appointed as the ministry's other vice finance minister, mostly in charge of domestic affairs.
Tango, who has worked as a secretary for former Prime Minister Junichiro Koizumi, replaces Kazuyuki Sugimoto.
Japan's Finance Ministry and the Financial Services Agency normally reshuffle personnel around July every year.
The ministry has picked Tomoyuki Furusawa, who now acts as a key contact between the ministry and the Bank of Japan, as the new head of its currency division,
Furusawa, who has spent much of his career in the ministry's budget bureau, will replace Yoshiki Takeuchi as director of the ministry's foreign exchange markets division later in the month. ($1=95.84 Yen) (Reporting by Stanley White, Yoko Nishikawa and Hideyuki Sano; Editing by Michael Watson)