Abe's Liberal Democratic Party, which had continuously ruled Japan for over 50 years until its defeat in 2009 by the Democratic Party of Japan, regained its status by winning at least 320 seats in the 480-seat lower house of Parliament along with its ally New Komeito in Sunday's elections, the Mainichi Daily News reported.
The defeat of outgoing Prime Minister Yoshihiko Noda and his Democratic Party of Japan, which had led the country for three years, as well as the return of nationalist Abe to the prime ministerial post he held in 2006-07 had been widely predicted in polls.
U.S. President Barack Obama congratulated Abe "on his party's success in the elections."
"The U.S-Japan alliance serves as the cornerstone of peace and prosperity in the Asia-Pacific and I look forward to working closely with the next government and the people of Japan on a range of important bilateral, regional and global issues," said Obama's message released by the White House. "I also extend my appreciation to Prime Minister Noda for his many contributions to U.S.-Japan relations."
Mainichi said under Japanese Constitution, a two-thirds majority will allow the LDP and its ally to pass bills rejected by the upper house through a second vote in the lower house.
The report said Noda's DPJ, in power only for three years and three months, fell far short of 100 seats and now must sit in opposition. Noda was Japan's sixth prime minister in as many years, pointing to the country's current political turmoil.
The election results sent stocks rising in early trading on the Tokyo Stock Exchange with the benchmark 225-Nikkei Stock Average gaining nearly 140 points. The Japanese yen was trading sharply down against major currencies.
Kyodo News reported the conservative LDP had campaigned for stronger defense and conservative nuclear energy policies and Abe had talked tough on China. The report said LDP was expected to press the Bank of Japan to ease monetary policies to revive the economy burdened by deflation and a strong yen.
Noda, saddled with a gloomy economic forecast and growing territorial tensions with China over the disputed Senkaku Islands, dissolved Parliament last month, paving the way for Sunday's elections. The action came after a government report that 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.
Abe was expected to be named to his old post during a special parliamentary session to be called Dec. 26, and the LDP was expected to form a coalition government with New Komeito, the Mainichi report said.
The LDP-Komeito however does not have a majority in the upper house, which would mean seeking support from other parties on individual policy issues.
Members of Noda's DPJ assessed the reasons for their defeat, Kyodo reported.
"There were policies in our manifesto that we could not realize and a lot of lawmakers left our party, resulting in severe criticism of our party management," DPJ policy chief Goshi Hosono had said on a television program as polls showed the party was headed to a defeat.
Prior to the election, the party had apologized for being too optimistic on its promise to boost spending on children and the elderly and to engage in a less bureaucracy-oriented politics, the report said.
DPJ's successes had included passage of doubling the 5 percent sales tax rate by 2015.
On LDP's victory, The New York Times quoted some observers that it indicated the pacifist nation, faced with rising tensions with China, may be willing to accept Abe's calls for a stronger military.
However, the majority view was that the Sunday results were not so much a swing to the right as a rebuke of the incumbent DPJ, it said.
In his own assessment, Abe said: "We recognize that this was not a restoration of confidence in the Liberal Democratic Party, but a rejection of three years of incompetent rule by the Democratic Party."
"This is a landslide without a mandate," Kyoto University political scientist Satoshi Machidori told the Times. "Mr. Abe shouldn't view this as a carte blanche to do as he pleases."