Caroline Kennedy attends an anniversary celebration at Grand Central Terminal on February 1, 2013 in New York. 

The former first daughter, who long resisted running for public office, may enter a larger limelight than anytime since her youth as she takes a key diplomatic role.

In an understated rollout to the long rumored nomination, Obama called Kennedy and several nominees to other posts "fine public servants."

"Our nation will be well-served by these individuals, and I look forward to working with them in the months and years to come," he said in a statement.

The nomination of Kennedy as ambassador shows the "great importance" Washington places on the relationship, Tokyo said Thursday.

"The government of Japan understands that Ms. Caroline Kennedy has the deep confidence of President Obama, and it highly appreciates her nomination as reflecting the great importance the Obama administration attaches to the Japan-US alliance," said a statement from the foreign ministry.

Kennedy needs to be confirmed by the Senate, but she has no open critics and the body is led by the Democratic Party which reveres her father.

The 55-year-old, whom many Americans remember as a girl in the White House, was an early and close Obama supporter.

When the then senator was locked in a tough fight for the Democratic presidential nomination against perceived front-runner Hillary Clinton, Kennedy threw her family's prestige behind Obama by saying he could be "a president like my father."

Kennedy has limited experience in foreign affairs and is not known for any connection to Japan, although she visited in 1986 during her honeymoon with her husband Edwin Schlossberg.

Her father was seriously wounded in 1943 during World War II when a Japanese destroyer rammed his boat in the Pacific.

Kennedy was honored for saving others despite the back injury, which caused him pain throughout his life.

The prospect of Kennedy's nomination had already been welcomed by Japan, a close US ally which is accustomed to high-profile US ambassadors.

Previous US ambassadors have included former vice president Walter Mondale, former speaker of the House Tom Foley and former Senate majority leader Howard Baker.

By contrast, Obama's first-term ambassador John Roos -- known primarily as a fund-raiser -- was seen by some Japanese commentators as a sign of a lower US priority on the country.

Roos, however, was later praised for handling the round-the-clock US response to the March 2011 tsunami disaster.

If confirmed, Kennedy would be the first woman to take up the post, a feat sure to be noticed in a country that has historically ranked lower than other wealthy nations in terms of women's empowerment.

Kennedy was five days short of her six birthday when her father was assassinated in 1963. She suffered further tragedies when her mother, Jacqueline Kennedy Onassis, died in 1994 and her brother, John F. Kennedy Jr., was killed in a plane crash in 1999.

The family's sole survivor has supported the Kennedy brand of progressive politics but mostly shunned the spotlight. Instead, she largely dedicated herself to her preserving her father's legacy and wrote books, two of them on the defense of civil liberties.

Kennedy's nomination comes as the Obama administration pursues what it describes as a "pivot" or "rebalancing" toward Asia, calling for the United States to put a greater priority on a continent marked by China's rise.

Kennedy would take over at a time of expected stability in US-Japan relations. Prime Minister Shinzo Abe's coalition won a comfortable victory in upper house elections Sunday, ending an era of divided parliaments that led to the quick downfall of six premiers.

Obama faced hiccups in his relationship with Japan during his first year when left-leaning prime minister Yukio Hatoyama took office and called for a more "equal" relationship with Washington.