TOKYO - Former Japanese Foreign Minister Seiji Maehara, who has called beating deflation a top priority, is likely to throw his hat in the ring to become the next prime minister, Jiji news agency said on Monday, clouding the chances of Finance Minister Yoshihiko Noda, who had hoped to win Maehara's support.

Unpopular Prime Minister Naoto Kan is expected this week to confirm his intention to resign, clearing the way for Japan to select its sixth prime minister since Junichiro Koizumi ended a rare five-year term in 2006.

Japan's new leader must grapple with a resurgent yen, push ahead with efforts to rebuild from the March earthquake and tsunami and end a radiation crisis at the crippled Fukushima nuclear plant -- all while figuring out how to curb a huge public debt and cure the ills of a fast-ageing society.

"Foreign Minister Maehara has begun final coordination in preparation to run," Jiji reported, quoting unidentified party sources.

Noda, a 54-year-old fiscal conservative, had hoped to win the backing of Maehara, 49 -- the most popular of possible candidates among voters in recent polls -- in his push to replace Kan, a once-fiery civic activist whose ratings have slipped well below 20 percent since he took office in 2010.

"This changes the dynamic completely, although it doesn't give you the answer to who will win," Chuo University political science professor Steven Reed said of Maehara's expected decision to run in the Democratic Party (DPJ) leadership race.

At least five other DPJ lawmakers are eyeing a run at the nation's top job in the ruling party race, expected to be held around August 29 after passage of two key bills now before parliament.

The new party leader becomes prime minister by virtue of the party's majority in parliament's powerful lower house.

Whether and when to raise taxes to pay for rebuilding from the March disaster and to fund the bulging social security costs of a fast-ageing society will be a focus of the party race, although even Noda has been toning down his stance of favouring raising taxes soon.

Maehara topped the list of voters' preferred candidates in a Kyodo news agency survey, with 28 percent against a mere 4.8 percent for Noda.

But political analysts said Maehara's popularity was no guarantee that he would win the DPJ race, in which only DPJ members of parliament and not rank-and-file members take part.