Former defense minister Shigeru Ishiba will become Japan's prime minister next week after winning the conservative ruling party's leadership vote on Friday.

The 67-year-old train lover beat arch-nationalist Sanae Takaichi -- who would have been the country's first-ever woman leader -- 215 votes to 194 in a run-off.

After his victory was announced at the Liberal Democratic Party (LDP) headquarters in Tokyo, Ishiba smiled and took off his glasses to wipe his teary eyes, and bowed repeatedly as his associates congratulated him.

"I will do my utmost to believe in the people, to speak the truth with courage and sincerity, and to make this country a safe and secure place where everyone can live with a smile on their face once again," he said in a short speech.

Ishiba had come close to the top job before, including in 2012 when he lost to nationalist Shinzo Abe, Japan's longest-serving leader who was later assassinated.

The LDP has governed almost uninterrupted for decades and holds a majority, meaning Ishiba will be elected premier by parliament on Tuesday.

The military model-maker with an affinity for 1970s pop idols says his experience tackling tough issues, such as agriculture reforms, makes him qualified for the job.

Yen surges

As prime minister, Ishiba will need to face down regional security threats, from an increasingly assertive China and its deepening ties with Russia to North Korea's banned missile tests.

His push to boost the military and call for the creation of an Asian NATO could rile Beijing, but he is careful with his words concerning China.

Following the result, China's foreign ministry spokesman said the country wants to improve ties with Japan, because "the long-term, sound and steady development of China-Japan relations serves the fundamental interests of the two peoples".

At home, Ishiba will be tasked with breathing life into the economy, as the central bank moves away from decades of monetary easing that has slashed the value of the yen.

The Japanese currency surged after Friday's result, firming to 142.94 against the dollar from 146.49 yen when the head-to-head between Ishiba and Takaichi was announced.

Ishiba supports the Bank of Japan's exit from its unorthodox ultra-loose policies and his win "will almost certainly be welcome news for policymakers" there, Capital Economics said.

He has also pledged to revitalise rural regions and proposes creating a government agency for disaster prevention.

In the first round of voting, a record nine candidates were in the running after the LDP's long-powerful factions disbanded this year over a funding scandal.

Takaichi, the economic security minister, is a vocal nationalist popular with the LDP's conservative wing. The 63-year-old was close to assassinated ex-premier Abe, whose supporters are still powerful.

In third place behind Ishiba and Takaichi was former environment minister Shinjiro Koizumi, a keen surfer whose father was prime minister in the 2000s.

'Courage in his convictions'

LDP leaders are in office for three years and can serve up to three straight terms. Unpopular Prime Minister Fumio Kishida did not run for re-election.

"I have a good impression of Ishiba, because he seems to have courage in his convictions," Junko Tominaga, a woman in her 50s, told AFP on the streets of Tokyo.

"I just don't want Japan to tilt further to the right under Ishiba in terms of defence."

Minoru Kitani, 46, said his "hopes for Ishiba aren't so high".

"But I agree with, and support, his belief that Japan needs to be protected better, made stronger and guarded against the threat of other countries," he said.

While "a woman prime minister would've been good," a win for Abe's mentee Takaichi would not "have done much to herald a fresh start for Japan".

The LDP has governed Japan almost uninterrupted for decades, with the main opposition parties rarely seen as viable alternatives.

During his term, Kishida has taken steps to double Japan's defence spending, opening the door for military exports as the LDP seeks to revise the pacifist post-war constitution.

He welcomed Ukrainian President Volodymyr Zelensky to a G7 summit in Hiroshima and has strengthened Japan's often testy ties with its neighbour South Korea.

But his rule was also tarnished by scandals, voter anger over rising prices and sliding poll ratings.