Prime Minister Shinzo Abe faces the toughest battle of his political life in a parliament session that opens on Monday after staking his job on extending Japan's naval mission in support of U.S.-led operations in Afghanistan.
Abe, who took office a year ago vowing to boost Japan's global security profile, said on Sunday he would not cling to his job if he could not extend the mission beyond a Nov. 1 expiry.
Opposition parties, which won control of parliament's upper house in a July election, are against the mission and can delay enactment of a bill to extend it.
Abe said on Sunday that he would do all he could to continue the mission to refuel coalition ships in the Indian Ocean -- seen as vital to Tokyo's ties with Washington.
He indicated he could resign if the mission were to end, prompting some to suggest the weakened leader might be seeking an honourable excuse to quit.
"I have no intention of sticking to my duties (as prime minister)," he told a news conference in Sydney after attending an Asia-Pacific leaders gathering there.
Financial markets are more worried right now about a decline on Wall Street and a jump in the yen against the dollar, but concerns about politics remain, especially as new figures showed Japan's economy contracted in the second quarter.
"Investors are concerned about the possible resignation of Prime Minister Abe," said a trader at a Japanese brokerage. "But the (currency) market ... is too busy digesting factors from the United States and Europe at the moment."
Abe's clout has been weakened by a string of scandals and gaffes by cabinet ministers that contributed to a drubbing for the Liberal Democratic Party's ruling coalition in an upper house election in July.
Some think he may now be setting the stage to resign with his head held high after a fierce battle over diplomacy.
"It's a time-honoured Japanese tradition to prepare for an honourable exit," said Koichi Nakano, a Sophia University political science professor. "The idea may be to make it easier to extend the support activities by putting his job at stake, but a change in the (main opposition) Democratic Party's stance remains very doubtful," Nakano added. "Maybe he's preparing for a
'kamikaze' action without hitting the target."
Others said Abe was trying to increase the pressure on Democratic Party of Japan (DPJ) leader Ichiro Ozawa to make some compromise while also avoiding a snap election for parliament's powerful lower house that the ruling camp could well lose.
"The DPJ strategy is to force a dissolution of the lower house. It could happen accidentally," said Toru Umemoto, a chief currency strategist who analyses politics for Barclays Capital. "The Liberal Democratic Party's is the opposite -- to avoid a dissolution of parliament before the end of the year.
Abe reshuffled his cabinet late last month, only to see one of his new line-up resign a week later.
Farm minister Takehiko Endo became the fifth to exit an Abe cabinet, four through resignation and one by committing suicide, when he quit over illegal deals at a farmers' group he headed.
A spate of other ministers and ruling party officials have also admitted to discrepancies in their political funding records, helping to erode a boost in support that Abe had received after tapping veteran lawmakers for his new cabinet.
A survey by TV Asahi on Monday showed that support for Abe's cabinet had slipped to 31.8% from 36.6% in a Sept. 1-2 survey. About 60% of respondents said Abe should quit by the end of the year if not sooner.
Analysts said Abe's resignation could set the stage for his close ally, hawkish Secretary-General Taro Aso, to take over once a law enabling Japan's naval mission to continue was passed.
Bills rejected by the upper house can be returned to the lower house and enacted by the ruling camp's two-thirds majority in the chamber, but this rarely used process takes time.