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FILE PHOTO: Japan's Prime Minister Shinzo Abe speaks on reports of the launch of a North Korean missile to reporters , at his official residence in Tokyo, Japan May 29, 2017. REUTERS/Toru Hanai/File Photo


By Kaori Kaneko and Elaine Lies

TOKYO (Reuters) - Japanese Prime Minister Shinzo Abe will reshuffle his cabinet and party leaders early next month, moving to shore up his worst levels of popular support since returning to power in 2012, following a historic loss in a Tokyo assembly election.

Last week's loss, delivered by a novice political group, spotlights Abe's potential vulnerability after nearly five years in power, with many blaming voter perceptions of arrogance on his part and that of his powerful Chief Cabinet Secretary, Yoshihide Suga.

Opinion polls on Monday showed Abe's popularity at its lowest since he returned to power late in 2012, with support of 36 percent in one conducted by the conservative Yomiuri Shimbun newspaper - tumbling from 49 percent a month earlier.

Another, in the liberal Asahi, found support of 33 percent, a slide from 38 percent from a week earlier, with 60 percent of independent voters not supporting Abe's cabinet - numbers Suga said the premier was aware of.

"I believe he wants to sincerely accept this as the voice of the people," Suga told a news conference, adding that the administration needed to "be even more earnest" about tasks such as rebuilding the economy.

Abe, in Europe for a summit of leaders of the G20 grouping of nations, told travelling media he would retain core officials in the reshuffle of the cabinet and ruling Liberal Democratic Party (LDP) officials planned for August.

"I will reshuffle the LDP leadership and the Cabinet members early next month, aiming to renew peoples' feelings," Jiji news agency quoted Abe as saying in Stockholm.

"Stability is extremely important to deliver results. The core structure of the Cabinet should not be changed so often."

Japanese media said the remarks mean he will retain Deputy Prime Minister Taro Aso, who also serves as finance minister, along with Suga and LDP number two Toshihiro Nikai, while ditching gaffe-prone Defence Minister Tomomi Inada.

He also said he would skip a planned visit to Estonia and would arrive back in Japan a day early to visit the flood-devastated southwest.

Reshuffling the cabinet is a step often taken by beleaguered leaders to repair popularity, but Suga denied that was the case.

"The prime minister is himself selecting the best person for each job in order to achieve what we have to do," he said.

Exactly a year ago, Abe's ruling bloc stormed to a landslide victory in an election for parliament's upper house, despite concerns over his economic policies and plans to revise the nation's postwar constitution.

His administration has since been battered by a scandal over suspicions of favouritism to a friend's business, verbal gaffes by cabinet ministers and concerns about Abe's intentions to revise the constitution.

He faced another challenge on Monday, when former vice education minister Kihei Maekawa testified to parliamentary panels on concerns Abe may have intervened to help win approval for a veterinary school run by an education group whose director, Kotaro Kake, is a friend.

Abe has repeatedly denied doing Kake any favours.

On July 2, Tokyo Governor Yuriko Koike's novice Tokyo Citizens First party and its allies - including the LDP's national coalition partner - won a landslide victory in the assembly election, taking 79 of the 127 seats up for grabs.

The LDP got 23 seats, its worst ever result in the capital and less than half its pre-vote tally.

(Additional reporting by Kiyoshi Takenaka,; Editing by Clarence Fernandez)

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