Japan's PM Abe: Time for talk is over on North Korea

Shinzo Abe and Trump

The dollar was modestly firmer above ¥112 in late Tokyo trading on Monday, with Japanese Prime Minister Shinzo Abe set to call a general election at an evening news conference.

Abe said he was seeking a mandate for his plans to use new tax revenues for education and elderly care, and for his defense policy toward North Korea's escalating missile and nuclear threat, saying the situation is tantamount to a national crisis. "I am ready for that", said Mr Abe, 63, who took office in December 2012 and is two years from becoming Japan's longest-serving prime minister.

The prime minister had been expected to face a grilling over the cronyism scandals during a session of parliament from Thursday and opposition party officials saw the move as a ploy to avoid hard questions.

Tokyo Governor Yuriko Koike, ahead of Abe's decision, reportedly announced that she would move to formulate a new national party called "Party of Hope" to challenge the Japanese PM.

A day after US President Donald Trump threatened to "totally destroy" North Korea if it attacks, Mr Abe said: "We consistently support the stance of the US - that "all options are on the table".

At the beginning, Prime Minister Abe expressed his intention to discuss pressing challenges facing both the Asian and African regions.

Prime Minister Shinzo Abe addresses the U.N. General Assembly at the U.N. headquarters in NY on Wednesday.

Despite a recent run of growth, the election victor will also have to contend with a sluggish economy, as the heavily indebted country grapples with a low birth rate and a shrinking labour force.

Abe is expected to announce the election at 6 p.m. briefing in Tokyo.

In July, his ratings had dropped to less than 30% but then recovered to above 50% in September.

Although Abe is expected to triumph in the vote, there are question marks over whether he will retain the two-thirds parliamentary majority needed to reform the constitution to strengthen Japan's military, one of his stated priorities. The same survey by Nikkei business daily showed 44 percent of voters planned to vote for the LDP. Reforms enacted a year ago will reduce the number of lower house seats to 465 from 475.