Japanese Prime Minister Shinzo Abe is considering postponing a tax hike and dissolving the powerful lower house for a snap election in December, reports said Wednesday.

"The prime minister is considering various options, and one of them is a House of Representatives election by the end of the year," the Kyodo News agency reported, citing an unnamed government source.

The premier may dissolve the lower house as early as November 19, two days after he returns from a summit of G20 countries in Australia, Kyodo quoted an official of Abe's ruling Liberal Democratic Party (LDP) as saying.

Abe is preparing to dissolve the house next week, news agency Jiji Press said, citing sources, with a likely election date of December 14 also suggested by other media outlets. December 21 would be another possible option, Jiji said.

Abe, who is attending the ASEAN summit in Myanmar on Wednesday, has to make a decision soon on whether to raise the nation's sales tax to 10 per cent next year from the current 8 per cent. His top economic advisors have opposed the move amid sluggish consumer demand following the first tax hike in April from 5 per cent.

Observers expected Abe to put off the second increase and call an election to test his public mandate. This would be "political cover," Minoru Morita, a political analyst, said.

Abe is facing a series of tough issues next year, including restarts of idled nuclear reactors, and the 70th anniversary of the nation's surrender in World War II which may rekindle historical tensions with Japan's regional neighbours.

Abe "believes the LDP could win another major victory if he calls a snap poll now" after a tax-hike delay and a long-sought meeting with Chinese President Xi Jinping, Morita said.

"The opposition camp has been hopelessly fragmented and they have yet to start forging an electoral alliance," he added.