As he takes helm, Japan's new premier indicates he's holding to Nakasone course

Noboru Takeshita is emphasizing continuity to cope with the economic turmoil that greets him as Japan's new leader. The dollar's recent relentless descent has promoted fears of a reversal of Japan's recent economic upsurge. The value of the dollar fell to a post-war record low of 134.40 yen in Friday trading on the Tokyo foreign-exchange market.

The currency instability, on top of stock market woes, has renewed tensions between the major industrial powers - particularly between Japan, West Germany, and the United States - over responsibility for the crisis.

Mr. Takeshita's first decisions - on the formation of his Cabinet - were clearly aimed at reassuring Japan's Western partners and worried Japanese business circles. He asked the two key ministers dealing with international economic policy - Finance Minister Kiichi Miyazawa and Trade and Industry Minister Hajime Tamura - to stay on. The unusual gesture of continuity ensures that delicate negotiations on trade and monetary issues, especially with Washington, will not be disrupted at all.

In other ways, the always careful Mr. Takeshita has signaled that former premier Yasuhiro Nakasone's policies will continue. New Foreign Minister Sousuke Uno is a senior member of Mr. Nakasone's faction within the ruling Liberal Democratic Party. The defense post will be filled by a member of Mr. Miyazawa's faction, as it was during Nakasone's administration.

The Cabinet clearly reflects the political debt which Takeshita owes his predecessor. The deadlock among the three candidates for the post was only resolved when Nakasone was asked to anoint his successor. Until the very end, there was no indication he would name Takeshita.

Nakasone's faction received some key plums in the Cabinet, notably the construction and posts and telegraph ministries - two strongholds of Takeshita's faction which are known as powerful sources of money and patronage. While Nakasone himself will have no official role, he will head a new think-tank on international strategic issues which is seen as a vehicle for his continued involvement in foreign policy.

In Tokyo political circles, the talk is that Nakasone will be the true power behind the throne.

But other observers see this as a typical example of Takeshita's trademark skills as a politician who takes care to ensure party unity. ``Some people in the LDP say Takeshita is not so weak,'' political analyst Hajime Takano, editor of Tokyo Insider, says. ``Takeshita is very clever at managing things. He will slowly and steadily bring Nakasone's influence down.''

The agenda set by Takeshita is dominated by economic issues, all linked to the need to continue economic growth based more on internal demand than on exports. Topping the list of priorities are tax reform, curbing the horrendous land speculation which is dampening housing growth, and solving trade disputes with the US.

Takeshita is known as well for his good relations with the opposition parties. Those parties, though outnumbered, can tie up legislation as they did earlier this year with Nakasone's tax package. Their cooperation will be key to Takeshita's hopes to get his administration off to quick and strong start.