Japanese Prime Minister Fumio Kishida said on Wednesday that he will not seek re-election as head of his party, meaning the end of his tenure as prime minister after just under three years.

The ruling Liberal Democratic Party (LDP), which has governed Japan almost uninterrupted since 1945, is due to hold an internal leadership contest next month. Its popularity ratings have slumped because of rising prices.

"In this presidential election, it is necessary to show the people that the LDP is changing and the party is a new LDP," Kishida told reporters in Tokyo.

"For this, transparent and open elections and free and vigorous debate are important. The most obvious first step to show that the LDP will change is for me to step aside," he said.

"I will not be running in the forthcoming presidential election."

Kishida had informed senior administration officials of his intention not to run, media including national broadcaster NHK and Kyodo News reported earlier.

The head of the ruling party is traditionally also prime minister.

Kishida, 67, has been in office since October 2021, and has seen his poll ratings slide sharply in response to rising prices hitting Japanese incomes.

His Cabinet's support rating has been languishing around 25 per cent this year, according to an NHK poll.

Kishida's decision to quit will trigger a contest to replace him as party boss, and by extension as the leader of the world's fourth-biggest economy.

The successor the LDP chooses could face increases in living costs, escalating geopolitical tensions, and the potential return of Donald Trump as US president next year.