UPDATE: Japan Business Heads Urge Noda To Deal With Quake Reconstruction

Adds Hitachi and Fujitsu comments at fifth-eighth paragraphs and business lobby leader comment at 11th-12th paragraphs)

By Kana Inagaki And Kosaku Narioka

Of DOW JONES NEWSWIRES

TOKYO (Dow Jones)-- Japanese business leaders called Monday on Finance Minister Yoshihiko Noda--who won the race to become the country's next prime minister--to swiftly implement policies to accelerate reconstruction from the March 11 disaster.

"I have long believed that Mr. Noda is a stable political leader who is well versed in tax, fiscal and social security policies and who has the ability to take action," Hiromasa Yonekura, chairman of the Japan Business Federation, or Nippon Keidanren, told reporters.

"It is encouraging to have someone like him take over at a time when Japanese politics are facing an extremely challenging situation," the head of Japan's biggest business lobby said.

Noda, 54, defeated Trade and Industry Minister Banri Kaieda to become the head of the ruling Democratic Party of Japan in a win that will essentially ensure that he will become the country's next prime minister.

Hitachi Ltd. (6501.TO) President Hiroaki Nakanishi said the new government will need to move quickly to address a string of issues facing the country, including a correction of yen strength.

"We want the new administration to manifest strong leadership in politics and to ramp up efforts toward reconstruction from the earthquake," Nakanishi said in a written statement.

The head of the Japanese technology conglomerate also urged the government to reformulate an energy policy with a medium to longer-term perspective in the aftermath of the country's worst nuclear crisis at the Fukushima Daiichi nuclear power plant.

In a separate statement, Fujitsu Ltd. (6702.TO) President Masami Yamamoto said he hopes the soon-to-be prime minister will "exercise decisive leadership" and implement drastic deregulation and investment in the energy, environment and health care and other business segments to bolster the competitive edge of Japanese firms.

On how to finance quake reconstruction, Keidanren's Yonekura said he agreed with Noda on the need for a temporary tax increase, adding the public needs to share the burden with companies to speed up reconstruction.

Business lobby heads welcomed fresh steps the government unveiled last week to weaken the yen, including the creation of a $100 billion credit facility for Japanese companies. But they also acknowledged the challenges Noda will face in further combating the issue, saying the yen's appreciation stems from external factors in the United States and Europe.

"For a nation like Japan, which is an economic power among countries, there are limits on what it can or cannot do," in dealing with the strength of its currency, said Yasuchika Hasegawa, chairman of the Japan Association of Corporate Executives.

"As for monetary policy, which the Bank of Japan is in charge of, I expect him to coordinate properly and take all possible measures that can be taken," he added.

-By Kana Inagaki, Dow Jones Newswires; 813-6269-2795; kana.inagaki@dowjones.com

Hiroyuki Kachi and Yoshio Takahashi contributed to this article.