UPDATE 2-Japan PM picks senior lawmaker as finmin in cabinet change

* PM Noda reshuffles cabinet to prepare for elections

* New finmin seen following Noda's line on fiscal policy, currency

* Foreign, defence, trade ministers keep their posts

(Updates with confirmation, analyst's comment, detail)

By Tetsushi Kajimoto

TOKYO, Oct 1 (Reuters) - Japanese Prime Minister Yoshihiko Noda appointed as finance minister on Monday a senior lawmaker who worked with him on a plan to raise the sales tax, in a cabinet reshuffle aimed at boosting his ruling party's chances in an election expected in months.

Koriki Jojima, 65, who served as the parliamentary affairs chief for the ruling Democratic Party of Japan (DPJ), will take charge of the world's third largest economy as it teeters on the brink of recession, hurt by a global slowdown and a strong yen.

Jojima is likely to toe Noda's line on the need for fiscal reforms given he was instrumental in securing a political deal on the prime minister's signature plan to double the sales tax to 10 percent by October 2015.

He replaced Jun Azumi, who moved to a senior party post.

Little is known about Jojima's views on monetary and currency policies, but he is expected to stick with the government line on the need to work with the central bank to beat deflation and to act firmly against excessive yen gains.

"I see no change in currency policy whereby authorities give verbal warning when the dollar falls below 78 yen and stand ready to intervene in case of excessive gains," said Kyohei Morita, chief Japan economist at Barclays Capital.

The foreign and defence ministers kept their jobs in the reshuffle that comes amid heightened tension between Japan and China over a long-simmering territorial dispute.

The cabinet shake-up, seen as a last-ditch effort to shore up the Democrats' sagging ratings ahead of a general election, is the third since Noda took office in September 2011, becoming the party's third prime minister in as many years.

Opinion polls show the main opposition Liberal Democratic Party, ousted in 2009 after half a century of almost non-stop rule, will likely come first in the election, meaning Jojima's time in office could be short.

Noda, 55, promised in August to call a general elections "soon" in return for backing on his contentious sales tax plan. But the former finance minister remains coy on the timing of the vote.

(Editing by Tomasz Janowski and Robert Birsel)


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