Prime Minister Shinzo Abe says he is calling a snap election and delaying an expected sales tax rise after figures showed Japan was in recession.

Less than two years after he swept to power pledging to reinvigorate the flagging economy, Abe will go to the polls – probably in the middle of December – telling voters that more needs to be done to fix years of growth-sapping price declines.

“I will dissolve the lower chamber on (November) 21st,” Abe told a news conference on Tuesday.

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He did not give a date for the election, which was not due until 2016, but the media consensus is that it will be Sunday, December 14.

The past 24 months have seen two of the so-called “three arrows” of “Abenomics” fired – massive fiscal stimulus and a flood of easy money.

A third “arrow” of structural reforms remains stuck in the quiver, a victim of the vested interests it is intended to undermine.

At its heart, Abenomics is intended to push prices up and get Japanese shoppers spending, with the aim of generating a self-reinforcing recovery as companies employ more people to meet growing demand.

The measures have sent the yen plunging, pushing up the cost of imports, including the fossil fuels used to power the country.

That stretched consumers – 60 per cent of the economy – who were then walloped again in April by a rise in sales tax from 5.0 to 8.0 per cent, resulting in two consecutive quarters of contraction.

A growing clamour has been heard over recent months to suspend part two of the tax rise, to 10.0 per cent, which was due for October.

“Today, I reached a conclusion that I will not raise the consumption tax to 10 per cent in October next year … and that it should be delayed by 18 months,” he said.

But in an apparent nod to the fiscal hawks in his finance ministry who say Japan has to get a handle on its soaraway pile of national debt, he pledged the tax rise will be implemented.

“It will never happen that the government will postpone the next tax raise again after 18 months,” he said.

“After postponing for 18 months I intend to raise the tax for sure, regardless of economic conditions, which is a significant change. We need to ask the approval of the people for this change (by calling an election).”

Ignoring criticism that he is currying favour with voters, Abe has ordered his ministers to compile a fresh economic stimulus package, including measures to ease the impact of rising import prices.

Opposition parties, who are still in disarray after their 2012 drubbing, will hope to capitalise on the difficulties faced by voters whose wages are at a standstill while prices rise.