Mr Noda, seen as a fiscal conservative, will face a host of daunting problems, including the post-tsunami recovery, nuclear crisis, sluggish economy and yen's surge.
He must seek to unify the fractious ruling Democratic Party of Japan and restore public confidence in politics amid widespread disgust over squabbling in parliament and a perceived lack of leadership.
Mr Noda is a "moderate voice" in the ruling party, Sheila Smith, a senior fellow at the Council on Foreign Relations in Washington, wrote in a comment.
"He has a steady temperament and a reputation for fairness in a party where loyalties have been severely tested of late."