But first he must survive an urgent test: Win back voters disgusted by the broken promises of his predecessor, Yukio Hatoyama, by next month's upper house elections.
Decisive and down-to-earth, Kan may have what it takes to regain support for the battered Democratic Party of Japan, analysts say.
Unlike the blue-blooded Hatoyama, Kan comes from an ordinary family and got his political start in civic activism. He's known for speaking his mind and gained popularity in the 1990s for exposing a government cover-up of HIV-tainted blood products.
"He has a chance. He's a credible new leader. Nobody doubts his reformist credentials," said Koichi Nakano, political science professor at Sophia University in Tokyo.
"But there's no real honeymoon period," Nakano said. "Even though (the election) is his first test, it will be his make-or-break test."
Initial signs are positive. A survey by Kyodo News agency conducted Friday and Saturday showed that the Democrats' approval rating jumped to 36.1 percent, up 15.6 points from the previous poll in late May. Those who expressed high hopes for Kan totaled 57.6 percent.
The survey of 1,026 people didn't provide a margin of error, but one of that size would normally have a margin of about 5 percentage points.
The Democrats swept to power just nine months ago, trouncing the long-ruling conservatives amid high hopes for change and more government accountability. But public opinion quickly soured after Hatoyama got ensnared in a political funding scandal and reneged on a campaign promise to move a key U.S. Marine base off the southern island of Okinawa.
Kan, 63, Japan's sixth prime minister in four years, is keenly aware of the challenges ahead of him.
"Our first priority is to regain the trust of the people," he told party members Friday, when he was voted into office by the more powerful lower house of parliament.
He pledged to confront problems linking "money and politics." Finance minister under Hatoyama, Kan stressed the need to spur growth and tackle deflation in the world's second-largest economy.
Otherwise, Kan offered few specifics, and analysts predicted he would proceed with caution.
"Having seen Hatoyama up close, how he dug a hole for himself, Kan realizes that cheap words are what he should be avoiding," Nakano said.
In the past, Kan has said Japan needs to raise its consumption tax from the current 5 percent to reduce the bulging deficit. But on Friday he was much more circumspect, saying only he would make an announcement at an appropriate time.
And rather than hurriedly announce a Cabinet, Kan said he would reveal the members early next week, after which they would be appointed by Emperor Akihito.
Japanese media reports Saturday said Kan's finance minister would likely be Yoshihiko Noda, the senior vice finance minister. They also said that Renho, who gained media attention for her tough questioning of bureaucrats during a public budget screening process last fall
- an attempt to make government decisions more transparent - would be named consumer affairs minister. A former television announcer, Renho goes by one name.
Kan faces plenty of prickly problems, including executing a recent agreement between Tokyo and Washington to relocate U.S. Marine Air Station Futenma to a less-crowded part of Okinawa. Hatoyama's failure to keep a pledge to move the airfield off the island led to his downfall.