Japanese Prime Minister Junichiro Koizumi reshuffled his cabinet yesterday to boost his popularity and give impetus to reform ? especially postal reform ? but the mix of familiar faces with unknowns raised doubts about whether he would achieve those goals.

Heizo Takenaka, 53, a key architect of many of Koizumi?s economic reforms, retained his portfolio in charge of macroeconomics and, as expected, assumed a new post in charge of reform of the postal system ? a centrepiece of Koizumi?s agenda but anathema to many conservative ruling party members.

Takenaka gave up his portfolio in charge of financial services to his deputy, Tatsuya Ito, 43, but analysts said Ito?s promotion was a clear signal there would be no backtracking on banking reforms, seen as crucial to sustaining economic growth.

Finance Minister Sadakazu Tanigaki, Trade Minister Shoichi Nakagawa, Chief Cabinet Secretary Hiroyuki Hosoda and Internal Affairs and Communications Minister Taro Aso all retained their posts.

Foreign Minister Yoriko Kawaguchi, who is not a member of parliament and had been criticised for her lack of clout, was replaced by Nobutaka Machimura, 59, a former education minister who is close to the prime minister.

While there was no sign that Koizumi had caved in to anti-reformers by granting them posts, some analysts questioned whether the new lineup would have the desired impact.

?There?s nothing here to gain popularity that anyone can see,? said Steven Reed, a political scientist at Tokyo?s Chuo University. ?It includes no well-known anti-reformers ... but there is no visible clout.?

A relatively unknown politician, Yoshinori Ohno, 68, will take over as defence minister, a vital position as Japan expands its global security role.

Hidehisa Otsuji, an Upper House LDP member, took over the health, labour and welfare portfolio, which must manage reform of a state pensions system creaking under an ageing population.

Kazuo Kitagawa, 51, the policy chief of the Buddhist-backed New Komeito Party, the junior member of Japan?s ruling coalition, takes over the transport and land portfolio.

Financial market players foresaw no major shifts in economic policies as a result of the personnel changes.

One of the biggest of Koizumi?s past surprises was two years ago when he appointed Takenaka to the financial services post.

Takenaka produced a hard-line banking reform plan, triggering a steep stock market sell-off and dubbed the ?Takenaka shock?.

Two years on, though controversy persists, Takenaka?s programme to make Japan?s banks halve their non-performing loans by March 2005 is on track to meet its targets and some economists credit him with Japan?s economic recovery.

Doubts have emerged, however, over just how strong that recovery may be and the Tokyo stock market?s benchmark Nikkei average slipped on Monday, marking a seventh straight session of decline and the longest losing streak since December 2002.

Prior to the cabinet reshuffle, Koizumi unveiled a new lineup of executives in his Liberal Democratic Party (LDP). Analysts were also cool to his choices of politicians who favour reform but could lack the clout to push it through.

Former agriculture minister Tsutomu Takebe was appointed LDP secretary-general, the party?s second in command and its main election strategist.

Takebe is said to back reform of the postal services, savings and insurance systems, which proponents say is needed to cut waste and allow private financial firms greater scope to compete.

But Takebe could be an easy target for opposition attacks. He came under heavy fire when he served as agriculture minister for his handling of Japan?s first case of mad cow disease in 2001.

?Without party support, Koizumi cannot do postal reform,? said Shigenori Okazaki, a political analyst at investment bank UBS. ?But this party lineup is too weak.?

Analysts said Koizumi ? who in the past has surprised and pleased the public with personnel appointments ? was running out of political rabbits to pull out of his hat.

Media surveys earlier this month put his public support at just over 40 percent, a far cry from the dizzying 80 percent he boasted when he took office.

Koizumi?s decision in June to push through unpopular pension reforms to raise premiums and cut benefits hurt his support and helped the opposition Democrats in a July Upper House poll.

Sending troops on a reconstruction mission to Iraq, the Japanese military?s biggest and riskiest deployment since World War Two, also dampened public enthusiasm for the prime minister.

<B>Linda SIEG</B>

<I>?Analysts said Koizumi ? who in the past has surprised and pleased the public with personnel appointments ? was running out of political rabbits to pull out of his hat.?</I>