Japan's Kyodo news agency said Prime Minister Noda had met opposition Liberal Democratic Party (LDP) leaders and had floated an October 7 election date after they rejected his suggestion to hold polling in early November.

Earlier this month, Noda had promised to hold elections midway through his term when he got rare opposition backing in parliament to pass legislation that doubled the sales tax to 10 percent by 2015.

That tax hike is aimed at reducing Japan's mounting sovereign debt, but the pitch to the opposition cost Noda defections from his own DPJ, which is a mix of conservatives, center-left lawmakers and ex-socialists.

Fellow Democrat Sumio Mabuchi said on Thursday that "no one" in the governing DPJ wanted an early poll "but the tide is shaping up already as the prime minister promised to call elections." Parliament's full term would run otherwise until August 2013.

Early election part of deal

Finance Minister Jun Azumi recently said that the center-left government would run out of money by the end of October unless the opposition, including LDP ally the New Komeito party, approved a bill to allow a fresh sale of bonds to refill state coffers.

"The scenario is that parliament will hold an extraordinary session early in October and may pass the deficit bond bill and an extra budget before the prime minister dissolves the (lower) chamber," said New Komeito's policy chief Keiichi Ishii.

An election would come as Japan wrangles with China and South Korea over disputed islands and declining trade. Japanese statistics released on Wednesday showed a 25 percent plunge in Japan's exports to the European Union since July of last year.

Noda meets anti-nuclear advocates

Noda on Wednesday also sought to stem public disquiet over Japanese nuclear power by meeting anti-nuclear demonstrators.

During the 30-minute meeting, broadcast live on the Internet, Noda said that Japan was working on "phasing out dependence on nuclear power in the mid to long term".

Opinion surveys show a majority of Japanese voters wanting a phasing out of nuclear power generation in the wake of last year's Fukushima reactor meltdowns. Only two of Japan's 50 reactors have been restarted as the island nation resorts to increased imports of liquefied natural gas, mainly from Australia.

ipj/slk (AFP, Reuters, dpa)