Shinzo Abe faces poll challenge from Tokyo governor Yuriko Koike

Shinzo Abe faces poll challenge from Tokyo governor Yuriko Koike

"I will dissolve the lower house on September 28", Mr Abe told a nationally televised news conference.

His image as a strong leader is thought to have bolstered support amid rising tensions over North Korea and has overshadowed allegations of cronyism that had eroded his popularity. A survey last weekend by the Nikkei business daily newspaper indicated that 44 percent of voters meant to vote for Abe's Liberal Democratic Party (LDP).

Japan is to have a snap general election in late October, reported on Monday afternoon several global media outlets. The prime minister had been expected to face a grilling over the cronyism scandals during Thursday's session, and opposition party officials saw the move as play to avoid hard questions.

"I am determined to resolve what can be called a national crisis together with the public by concentrating my entire being and soul into this issue", he said.

However, he faces a credible challenge from Tokyo governor Yuriko Koike, a former defence minister who has founded her own conservative party to rival the LDP.

He also said the new party will field candidates across the country.

Abe has served as Japan's prime minister for almost six years.

The election is likely to be scheduled for next month.

At a time of national crisis over North Korea, Japanese voters may see it as a "cynical and opportunistic move" created to divert attention from the scandals that weighed on Abe's popularity, warned Sano.

Over the weekend, a junior LDP cabinet minister, Mineyuki Fukuda, said he too would leave the ruling party to stand for election with Koike's new group.

As Mr Abe addressed reporters, more than 100 protesters gathered outside the Prime Minister's Office to demand his resignation.

Dr Sota Kato, executive director of the Tokyo Foundation think-tank, expects Mr Abe to retain his majority, though he said: "Most voters can see through his motives, no matter what Mr Abe says to try to legitimise the reasons for calling an election now".

First elected to the lower house in 2005, Fukuda was defeated in the 2014 general election in his constituency in Kanagawa Prefecture but clung to a Diet seat on proportional representation.

Rebalancing the spending would offset the potential negative effect on consumption from the tax rise, he said.

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