Only three years in power, the Democratic Party of Japan led by Prime Minister Yoshihiko Noda may yield to the Liberal Democratic Party as indicated by latest opinion polls, Kyodo News reported.
Noda is the country's sixth prime minister in as many years, pointing to Japan's current uncertain political scene.
Kyodo said while the LDP, the main opposition, could gain the most seats, no party may win a majority. That could again return the country to coalition rule, depending on which of the two major parties is able to stitch one together with the help of other parties.
Kyodo said its latest survey showed unaffiliated voters would play a key role in the election as the various parties campaign on how to revive the deflation-burdened economy, phase out nuclear energy and how to improve Japan's relations with China and South Korea in the worsening territorial disputes over islands in their region. A new threat is North Korea's planned rocket launch later this month.
Noda, saddled with gloomy economic forecast, dissolved the lower house last month, paving the way for the elections. The announcement came after the opposition had been pressing Noda to keep a promise, made in August, to go to the people "sometime soon" for their support in passing a key bill to double the 5 percent sales tax by 2015.
Noda's announcement followed a government report the economy shrank 0.9 percent in the July-September quarter, which meant another quarterly contraction would push the economy into recession.
Japan's economy, the third largest in the world after the United States and China, was hit hard by a devastating earthquake and tsunami in March of last year. Since then its exports have also been hit by the euro zone crisis and the territorial dispute with China.
It was Noda's party that ended LDP's almost continuous rule for over 50 years in 2009.
Kyodo reported about 1,500 people were expected to file nominations for the Dec. 16 election to 480-seat lower house, made up 300 single-seat districts and 180 proportional representation constituencies.