His decision to step down as Interior Affairs Minister, announced last week but to be carried out before a Cabinet reshuffle on September 26, will remove from the top ranks of Japanese politics a shrewd financial brain and a man regarded by many analysts its most effective reformer for decades. While the political scene will focus on the end of Junichiro Koizumi’s five-year run as Prime Minister on Wednesday, investors will be more interested in whether Shinzo Abe, his most likely successor, will bring with him as effective a weapon of change as Mr Takenaka — and whether the reform agenda will continue at all.

Mr Koizumi has been the charismatic public face of Japanese reform, one senior Finance Ministry source said, but it has been Mr Takenaka’s attention to detail, private sector experience and “battering ram” approach to implementing reform that has allowed Mr Koizumi to retain that image. Many global investors who have bought heavily into the Japanese recovery are clear that they were chiefly buying the “Takenaka story”.

From the start of the Koizumi era, Mr Takenaka was in charge of the Council on Economic and Fiscal Policy — the committee that said that Japan’s £500 billion pre-2001 fiscal spending efforts had not stimulated demand and should be replaced by regulatory and structural reform. The two men inherited a contracting economy, and have delivered one with 3.2 per cent real growth in fiscal 2005.

“Though history will probably judge Takenaka as the ultimate driver of reform during the Koizumi administration, Japanese public opinion is likely to be less favourable. Indeed, given how unpopular Takenaka was domestically, we could, bizarrely, see a strengthening in consumer sentiment as households believe that the hard yards on reform are now behind them,” Glenn Maguire, the chief Asia economist for Société Générale, said.

As chief of the Financial Services Agency between 2003 and 2004, Mr Takenaka succeeded in pushing banks through the bad loan crisis, which brought some of Japan’s biggest financial houses to the brink of collapse. When one, Resona Bank, did fall in early 2003, Mr Takenaka’s swift decision to nationalise it served as a warning to the rest of the banking industry to put its house in order.

It is widely believed that the 2005 decision of the healthy Mitsubishi Tokyo Financial Group to merge with the financially anaemic UFJ was heavily encouraged by Mr Takenaka, to prevent the latter from collapsing.

Yet throughout all this, Mr Takenaka was disliked by the political old guard of Japan, the huge conservative public and the media, who condemned his reforms as dangerous. In the face of this criticism, and repeated calls for his resignation, Mr Takenaka held firm, knowing that he had the full support of Mr Koizumi.

Perhaps his harshest test was the Japanese postal service, a monstrous collection of businesses and assets that includes the world’s biggest savings bank. Amid bitter political fighting, Mr Takenaka created the blueprint for the landmark privatisation, though he is likely to be far from the government when the process finally gets under way in 2017.

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