The election, scheduled for Aug. 30, could put the opposition Democratic Party of Japan (DPJ) in a position to win a majority in the lower house of parliament and fill the position of prime minister.
Speculation had been swirling over when Mr. Aso would call an election since he took office in last September. He was required to call elections by October.
"I want to seek the public's mandate by dissolving the House of Representatives early in the week beginning July 21," Aso told reporters. "Which party protects people's lives and Japan? That becomes a point of issue."
His own party members, however, say the timing could not be worse. The LDP suffered a major defeat in Sunday's election for the 127-seat Tokyo metropolitan assembly. Mr. Aso's ruling LDP and its coalition partner, New Komeito, lost its narrow majority, with opposition parties taking 66 seats. The DPJ won 54 seats, the largest number, while the LDP took only 38 seats.
Aso pressured to step down
Mr. Aso's announcement came as the opposition camp submitted a no-confidence motion against the administration and more LDP members were expected to urge him to step down. Some want to choose a new chief to lead the party into the election next month. As prime minister, Aso was criticized for policy flip-flops and weak leadership.
"Mr. Aso himself made a decision at the very end as he had said" he would, says Kazuhisa Kawakami, chair of the department of law at Meijigakuin University in Tokyo. "He is a person of great pride. He will not yield to increasingly open rebellion from within his party."
The ruling coalition has been unpopular as many people have been frustrated with their handling issues of pensions and social welfare in a rapidly aging society. Recent major polls show that 60 to 70 percent of people don't support the Aso administration.
"The LDP has been in disarray. All they can do is to rely on Soka Gakkai," Japan's largest lay Buddhist organization, and the power base of New Komeito, says Minoru Morita, an independent political analyst based in Tokyo.
Opposition party vows change
The DPJ have pledged to give priority to economic and employment policy, while reforming bureaucracy to reduce wasteful spending.
"Since the DPJ is making a compelling case for regime change, they insist on a thorough revamping of the nation's bureaucracy. The LDP has not been able to do that," says Mr. Kawakami. "The DPJ says they will change the costly and vertically divided bureaucracy."