Japan's Prime Minister Fumio Kishida on Tuesday appointed former health minister Shigeyuki Goto as the next economy minister after the incumbent abruptly resigned amid criticism over his links to a controversial religious group.

Following weeks of calls by opposition lawmakers to quit, former economy minister Daishiro Yamagiwa on Monday tendered his resignation, saying he "caused inconvenience to the government" by taking too long to clearly explain his links to the Unification Church.

Speaking to reporters on Tuesday, Kishida said he picked Goto based on his "political experience, high presentation skills and passion for economic and social reforms."

Goto's appointment comes as the government faces the urgent task of compiling an economic stimulus package and a fresh extra budget.

Kishida has promised to put together a stimulus package by the end of October to counter a painful rise in the cost of living amid the yen's plunge to 32-year-lows.

A ruling party official on Monday indicated the package may total around 26 trillion yen ($174.56 billion).

Yamagiwa became the first minister to resign from Kishida's government and the highest profile political casualty thus far from a widening scandal sparked by the killing of former Prime Minister Shinzo Abe in July.

The suspect in the killing bore a grudge against the Unification Church, alleging it bankrupted his mother, and blamed Abe for promoting it.

Abe's death brought to light widespread links between the church, which critics say is akin to a cult, and members of Kishida's ruling Liberal Democratic Party (LDP), causing a precipitous fall in his support ratings.

The LDP has acknowledged that many individual lawmakers have ties to the church but has said there was no organisational link to the church. Kishida has ordered an investigation into the church amid falling public approval over the issue.

Asked by a reporter about whether Goto's background as a long-time finance ministry bureaucrat could steer the government towards a more hawkish fiscal stance, Kishida brushed aside speculation saying: "I am confident that he will work on socio-economic reforms from a broad perspective."

A private-sector economist said the appointment of Goto was also likely based on his experience handling coronavirus-related policies as Kishida's former health minister. The economy minister's responsibilities include COVID-19 countermeasures, among others.

"The Kishida administration might be concerned about a resurgence of the coronavirus in the winter, and that might be one reason for the selection," said Toru Suehiro, chief economist at Daiwa Securities.