16 November 2012 Last updated at 06:48 ET

Japan PM Yoshihiko Noda set for general election

Mr Noda is the third DPJ leader since the last general election in 2009

Japanese Prime Minister Yoshihiko Noda has dissolved parliament ahead of a general election next month.

Mr Noda, in power since August 2011, will face newly-elected opposition leader Shinzo Abe in the polls.

Mr Abe's party is expected to win the most seats but the election is seen as unlikely to deliver a clear winner.

Mr Noda has lost support over his sales tax rise and handling of the Fukushima aftermath, while Mr Abe is an ex-PM who struggled to connect with the public.

Support ratings for both the ruling Democratic Party of Japan (DPJ) and the opposition Liberal Democratic Party (LDP) are low.

Analysis

Rupert Wingfield-Hayes BBC News, Tokyo

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Japan's Prime Minister Yoshihiko Noda has been forced to call an early election because of a Faustian pact he made with the opposition LDP.

In the summer, Mr Noda made the most notable achievement in his year as prime minister - he succeeded in pushing through a bill to double the rate of consumption tax in Japan to 10% by 2015.

But the cost of doing so was high. The DPJ last year lost its majority in the upper house of parliament, and so Mr Noda had to get the opposition LDP to pass the bill. The price for that support was the promise of an early election.

By the autumn, Mr Noda looked like he might be going back on his promise. But then came Japan's version of the fiscal cliff. Japan's government does not raise enough money from taxes to pay for its annual spending.

So halfway through the financial year (i.e. now) it runs out of money. It has to issue bonds to pay for the rest of the year. But that bond issue has to be approved by parliament.

Once again Mr Noda has had to go to the opposition LDP to get through the emergency budget, and this time the new LDP leader, Shinzo Abe, demanded an immediate dissolution of parliament and early elections. And that is what he has got.

A number of other smaller parties draw some support - controversial former Tokyo Governor Shintaro Ishihara has formed one, so too former DPJ stalwart Ichiro Ozawa. Toru Hashimoto, the Osaka governor, is also forming a political party.

Polls show almost half of all voters are undecided, indicating that the next government will likely be a coalition.

"This is an election to decide on the nation's direction - to go forward or to go backward," Mr Noda said of the election set for 16 December.

"We are determined to do our best to have the Democratic Party of Japan at the helm of the nation... and fight it out to move politics forward," he added.

Revolving door

Mr Noda, who has been under pressure to call elections for months, agreed on Wednesday to do so after the opposition said it would back him on electoral reform and a deficit-financing bill.

He had lost public support over the move to double sales tax, although many analysts say it was necessary to tackle the country's massive debt.

The debate over nuclear energy, restarting suspended reactors and his perceived flip-flopping on the issue has also affected his popularity.

His main election rival will be Shinzo Abe, the man chosen to lead the once-dominant LDP despite a short term as prime minister in 2006-7 that saw his poll figures plummet.

Mr Abe is seen as a hawk - last month he visited the Yasukuni Shrine, angering China and South Korea who see the shrine as a symbol of Japan's past militarism. The shrine honours Japan's war dead, including those convicted of war crimes.

The LDP enjoyed more than 50 years of almost unbroken rule but lost power to the DPJ in 2009.

The DPJ promised more welfare spending and a better social safety net, but has struggled to deliver amid the economic downturn and 11 March 2011 earthquake and tsunami.

It has also seen multiple leadership changes - Mr Noda is the third DPJ prime minister since 2009.

Reports suggest the Tokyo and Osaka governors, Shintaro Ishihara and Toru Hashimoto, are in talks over a potential link-up in the polls.