The Japan Business Federation (Nippon Keidanren) on Monday appointed Canon Inc. President Fujio Mitarai to head the country's most powerful business lobby, taking over from Toyota Chairman Hiroshi Okuda in May.

Okuda, 72, said at a news conference he recommended Mitarai to become the next chairman because the Canon chief "is very internationally minded, but balances that with the Japanese style of management."

Mitarai, 70, worked for a total of 23 years in the United States, including a stint as president of Canon U.S.A. Inc.

Although Mitarai is knowledgeable about U.S. employment practices his philosophy led him, in that post, to adopt an approach to personnel issues that incorporated the strengths of Japan's long-predominant lifetime employment system.

Mitarai will assume the Keidanren post following a formal decision plenary meeting. He will be the first chief executive of a precision instruments maker to head the big business lobby.

Nippon Keidanren was established in 2002 through the merger of the Japan Federation of Economic Organizations (Keidanren) and the Japan Federation of Employers' Associations (Nikkeiren). The first head of Nippon Keidanren, Okuda, will complete his second two-year term in May.

Nippon Keidanren has strengthened its political influence under the leadership of Okuda, who has been a strong force behind Prime Minister Junichiro Koizumi's structural reform initiative.

Toyota Motor Corp. Vice Chairman Fujio Cho was regarded as a leading candidate to succeed Okuda.

Okuda, however, had publicly questioned the appropriateness of having Cho succeed him.

He said it would not be proper to allow someone from the same company to serve as head of Keidanren immediately after him.

Mitarai joined Canon's predecessor, Canon Camera Co., in 1961.