TOKYO (Reuters) - Embattled Japanese Prime Minister Naoto Kan on Wednesday promoted a junior cabinet minister the key foreign affairs portfolio after his top diplomat abruptly quit, handing him a long list of challenges including managing strained ties with China and keeping ties with ally Washington on an even keel.
State foreign secretary Takeaki Matsumoto will take over from pro-U.S. security hawk Seiji Maehara, who quit on Sunday after admitting he had taken about $3,000 in donations from a Korean national, Chief Cabinet Secretary Yukio Edano said.
"The prime minister made the decision based on his (Matsumoto's) abilities and knowledge, as well as on his diplomatic consistency -- the fact that he has been involved in some important matters as state foreign secretary," Edano told a news conference.
The resignation of Maehara, once seen as a likely successor to the unpopular Kan if he bows to pressure to quit, was a fresh blow to the premier and his Democratic Party of Japan (DPJ) as they fight to pass bills needed to implement a $1 trillion budget for the year from April and craft policies to curb Japan's massive public debt.
The successor will have to hit the ground running, attending a Group of Eight ministerial meeting in Paris on March 14-15 and a trilateral meeting with his counterparts from China and South Korea later this month.
Japan's relations with Beijing chilled markedly last year after Japan held a Chinese trawler captain following his boat's collision with Japanese patrol boats near disputed isles in the East China Sea.
In a sign that ties are still strained, Japan scrambled jets this month after Chinese naval planes flew near the isles, though they did not enter Japan's airspace. Tokyo also complained to Beijing this week after a Chinese helicopter flew close to a Japanese destroyer in the East China Sea.
The relationship between Japan and Washington, Tokyo's biggest security ally, was also damaged after the DPJ took power in 2009 and then-premier Yukio Hatoyama tried to keep a campaign pledge to move a U.S. airbase off the southern island of Okinawa.
Kan, who took over last June when Hatoyama suddenly quit, has promised to implement a 2006 deal to shift the base to a less populated part of the island, but faces stiff opposition from local residents.
Adding to the difficulties, the head of the Japan affairs office at the U.S. State Department, Kevin Maher, was recently quoted by Kyodo news agency as telling U.S. college students that Okinawans were masters of "manipulation" and "extortion", sparking outrage in Okinawa.
Assistant Secretary of State Kurt Campbell, who was to arrive in Tokyo on Wednesday, told reporters in Washington that the report was inaccurate but apologized for any misunderstandings it caused.
Japan's ties with Russia are also strained due to a territorial feud, after Russia President Dmitry Medvedev visited in November an island that both countries claim.
Matsumoto, a graduate of the prestigious University of Tokyo faculty of law and a former banker, was a policy chief in the DPJ when it was still an opposition party.
(Reporting by Linda Sieg and Yoko Kubota; Editing by Chris Gallagher)