Japan's Prime Minister Shigeru Ishiba announced Sunday that he will resign following growing calls from within his party to take responsibility for a historic defeat in July's parliamentary election.

Ishiba, who took office in October, said he was stepping down as prime minister and as the head of his conservative Liberal Democratic Party.

Ishiba, a 68-year-old moderate centrist, had resisted demands from opponents further to the right within his own party to resign.

He argued that he wanted to avoid a political vacuum at a time when Japan faces key domestic and international challenges, including US tariffs, rising prices and growing tensions in the Asia-Pacific.

Ishiba explained at a news conference Sunday night as he announced his resignation plans that he had intended for some time to take responsibility for his party's summer election loss, but was first determined to make progress in tariff negotiations with the United States. He described it as matter of the national interest.

“Who would seriously negotiate with a government whose leader says he is stepping down?" Ishiba said.

He said the moment had arrived with an order by US President Donald Trump on Friday to lower tariffs on Japanese cars and other products to 15 per cent from a previously imposed 25 per cent rate.

“Having reached a milestone in the US tariff negotiations, I decided now is the time to make way for a successor," Ishiba said.

Pressure from the party

The resignation came one day before his party was to decide whether to hold an early leadership election, which would have amounted to a virtual no-confidence motion against him if approved.

He said he made the “painful decision to resign” to avert that step because “it would cause a critical division within the party, and that is absolutely not my intention.”

Ishiba said he would instead start a process to hold a party leadership vote to choose his replacement, which is expected to be held in October. He is to remain as prime minister until a new party leader is elected and endorsed by the parliament.

He said he is not going to run, even though he regrets leaving behind unfinished business, such as measures for salary increases, agricultural reforms and further strengthening Japan's security.

Loss after loss

In July, Ishiba's ruling coalition failed to secure a majority in the 248-seat upper house in a crucial parliamentary election, weakening the stability of his government. The loss followed a defeat in the more powerful lower house, where the party-led coalition lost its majority in October, only two weeks after Ishiba took over.

Party lawmakers who support the prime minister said those who lost seats were largely ultra-conservatives who were linked to corruption scandals before Ishiba took office. Public polling showed that pressure on Ishiba to resign caused his support to grow.

Calls for Ishiba to step down grew after the Liberal Democratic Party last week called for a “complete overhaul” of the party following its losses.

A conservative heavyweight Taro Aso, known for his anti-Ishiba stance, and a minister and several deputy ministers in the Ishiba Cabinet requested an early vote, prompting others to follow suit.

Former Health Minister Norihisa Tamura said on a talk show of the public broadcaster NHK earlier Sunday that the best way to heal party divisions and move forward is for Ishiba “to settle” the dispute before Monday's vote. The party has already been distracted from necessary work on economic measures and on figuring out ways to gain opposition support in the next parliamentary session, Tamura said.

Possible candidates to replace Ishiba include Agriculture Minister Shinjiro Koizumi, as well as ultra-conservative former Economic Security Minister Sanae Takaichi, Chief Cabinet Secretary Yoshimasa Hayashi, a moderate and the protege of former Prime Minister Fumio Kishida.

Lacking a majority in both houses, the next party leader will have to work with the main opposition parties to get bills passed, experts say, or else face constant risks of no-confidence motions.

The opposition parties, however, are too splintered to form a big coalition to topple the government.