Japan's Abe appears to have decided on poll: LDP official to media

TOKYO (Reuters) - Prime Minister Shinzo Abe appears to have decided to call an early election, a senior ruling party lawmaker was quoted as saying on Thursday, as expectations mount the Japanese leader would postpone an unpopular tax hike and go to the polls. Abe said on Tuesday he had not decided on the timing of an election and his top government spokesman said on Wednesday that a decision on the national sales tax hike, which could derail a promised economic recovery, had yet to be made. Tadamori Oshima, a former deputy chief of the ruling Liberal Democratic Party (LDP), however, said Abe appears to have made a decision. "It looks like Prime Minister Shinzo Abe has finally made up his mind and it's fair to consider that he decided to go to the people," he was quoted by the Jiji news agency as saying. Delaying the tax hike and calling for an early election would be an attempt by Abe to lock in his grip on power before his voter ratings suffer a slide. Japanese media have been speculating that Abe could call for a snap election as early as next week, with the actual voting to be held next month. A government official close to the prime minister's office also told Reuters on Tuesday that Abe was likely to delay the tax hike. No election needed to be called until 2016 but political insiders said Abe, whose ratings have fallen below 50 percent in some surveys after political fund scandals forced two ministers to resign, might seek to renew his mandate before taking unpopular steps next year such as restarting nuclear reactors and passing laws to allow Japanese troops to fight abroad for the first time since World War Two. The LDP-led coalition is at little risk of losing its lower house majority given the weakness of the opposition camp, but could fall short of the two-thirds it has now, politicians said. Abe returned to power in December 2012 pledging to revive the economy with a mix of hyper-easy monetary policy, spending and reforms. Opposition politicians say delaying the tax hike would show that his "Abenomics" growth strategy has failed. The prime minister inherited the plan to raise the sales tax from his predecessor, Yoshihiko Noda. Abe, though, has argued that to achieve fiscal reform, Japan must end deflation and get the economy growing. Abe raised the tax to 8 percent from 5 percent in April, sparking Japan's biggest economic contraction since the global financial crisis in the second quarter. He has said he will decide on whether to proceed with the planned October 2015 increase to 10 percent after seeing third-quarter GDP. Preliminary GDP numbers are due on Monday. (Reporting by Antoni Slodkowski; Writing by Linda Sieg; Editing by Michael Perry and Miral Fahmy)