Naoto Kan said he will announce his new lineup Friday to push for reforms as Japan faces a string of daunting problems, including a rapidly aging population, growing national debt and anemic economy — the world’s third-largest.

"I will have the most powerful Cabinet," Kan said. "The changes will reflect how best we can push for reforms for Japan and tackle the problems."

He was speaking at the annual convention of his ruling Democratic Party of Japan, held in Chiba, just outside Tokyo, where more than 2,000 national and local lawmakers gathered to discuss agendas for the year.

It will be his third Cabinet since he took office in June.

The reshuffle is largely seen as an attempt to increase chances of passing key legislation, including the 2011 budget. Distracted by personnel issues and a scandal involving a party veteran, Kan’s government has been unable to make much progress in parliament.

Kan didn’t specify what changes he will make, but media reports say he will replace Chief Cabinet Secretary Yoshito Sengoku, who has come under fire from opposition parties for controversial comments on diplomatic and defense issues, and name a fiscal conservative to a key post.

The opposition bloc had threatened to boycott parliamentary sessions if Sengoku is not replaced.

Yukio Edano, the ruling party’s acting secretary general, is among the top candidates to replace Sengoku as Cabinet secretary, the top government spokesman, according to Japanese media reports.

Kaoru Yosano, a 72-year-old veteran lawmaker known as a staunch advocate of fiscal reform and supporter of raising the sales tax to meet the country’s climbing social security costs, is expected to be given a Cabinet post.

Yosano has held a number of senior government posts under the former Liberal Democratic government, and Kan’s likely decision to tap him suggests that the prime minister is focused on fiscal reconstruction and wants someone who could foster consensus across party lines.

Other key Cabinet members, including Finance Minister Yoshihiko Noda, Foreign Minister Seiji Maehara and Defense Minister Toshimi Kitazawa, are likely to retain their posts, Kyodo News agency reported.

At Thursday’s party meeting, Kan faced criticism from fellow party members that his administration was failing to tackle urgent problems confronting Japan.

Kan said Japan needs to embrace free trade and reform its protected farming sector to revive its struggling economy.

Tokyo is considering whether to join a U.S.-backed free-trade zone called the Trans-Pacific Partnership that nine countries are negotiating. Business leaders say Japan must join the TPP or suffer a competitive disadvantage, but farmers are opposed because of worries that cheaper imports would ruin them.

"Japan is now at a turning point. We can make changes on our own," Kan said.