Japan's Prime Minister Shigeru Ishiba pledged to take tougher measures against misuse of political funds after he was re-elected by parliament on Monday following a major loss in the polls last month by his governing coalition.

Ishiba’s Liberal Democratic Party and its junior partner Komeito together lost a majority in the 465-seat Lower House, the more powerful of Japan’s two-house parliament, in the October 27 election.

The defeat was blamed on voter outrage over financial misconduct by his party.

“We must remind ourselves of the basics that politics is for the people, as we tackle political and party reforms," Ishiba said. He said that in response to the poor election results, "We must be able to have empathy for the pain, sorrow and anger of the people.”

A special parliamentary session convened on Monday to pick a new leader in a vote required within 30 days of a general election.

Ishiba beat top opposition leader Yoshihiko Noda 221-160 in the first runoff in 30 years.

In his second Cabinet in just over a month, Ishiba reappointed most of its previous members, including Foreign Minister Takeshi Iwaya, Defense Minister Gen Nakatani and Chief Cabinet Secretary Yoshimasa Hayashi.

He replaced three ministers who lost seats or were affected by the election results.

Ishiba stressed the importance of pursuing the significant buildup of Japan's defence power.

He said he plans to attend Asia-Pacific Economic Cooperation and Group of 20 summits later this month to strengthen partnership with the Global South nations and the Asia-Pacific region. He said he will hold talks with US President Joe Biden, South Korean President Yoon Suk Yeol and other leaders.

His government is also reportedly arranging a possible meeting with President-elect Donald Trump. (AP)