TOKYO, June 12 (Reuters) - Japan's internal affairs minister is to resign after a row with Prime Minister Taro Aso over a personnel issue, in a blow to Aso ahead of a looming election, Kyodo news agency said on Friday.

Internal Affairs Minister Kunio Hatoyama had insisted that Yoshifumi Nishikawa, president of Japan Post [JP.UL], should be replaced. Aso had insisted Nishikawa remain in his position.

Hatoyama had insisted that Nishikawa be replaced because of Japan Post's attempt to sell its nationwide resort complex to leasing company Orix Corp (8591.T). The chairman of Orix had helped craft a government plan to privatise the postal system.