Japan’s ruling party, the Democratic Party of Japan, elected Yoshihiko Noda as its new head Monday. Noda will become the party's third prime minister since it took power two years ago.

“I’m firmly resolved to carry this heavy burden and ask for your support,” Noda, the 54-year-old finance minister, told DPJ lawmakers. “Let’s brace ourselves and work to achieve stable, reliable government,” he added in the meeting held in Tokyo.

What is in store for the Japanese with Noda taking over as premier?

First of all, there is the chance of higher taxation. Noda has strongly favored higher taxes, especially to fund reconstruction after the March 11 earthquake, tsunami and nuclear disaster. 

Noda takes over an economy that has been shrinking for the last three quarters and faces a stiff challenge to rebuild economic strength. In addition, DPJ has seen political infighting and slipping public approval. In a recent Yomiuri newspaper poll, DPJ's support was at 21 percent. 

The markets have so far responded positively to the news. Japanese bonds are retaining recent gains.
Noda himself has said the DPJ has not lived up to expectations and even let the people down on many occasions. With the government planning to spend 19 trillion yen ($248 billion) within the next five years for rebuilding, Noda sees no way other than to increase the taxes. This will be, by all means, a tough task for him.