TOKYO - Japanese Prime Minister Naoto Kan is making final arrangements to replace Yoshito Sengoku as his No 2 minister, the Asahi newspaper said, a move that may clear the way for debate on the next fiscal year's budget when parliament opens this month.

Related readings:  Japan PM will reshuffle cabinet  US envoy meets with Japan officials on DPRK  Defense chiefs of ROK, Japan to discuss military ties  Japan starts military exercise

Katsuya Okada, the ruling Democratic Party's secretary-general, is among the candidates for the chief cabinet secretary post but a final decision has not been made, the paper said on Wednesday without citing sources.