Tokyo, June 2 (DPA) Japanese Prime Minister Yukio Hatoyama announced Wednesday at a general assembly of his Democratic Party of Japan (DPJ) that he would step down as premier.

Hatoyama said he will resign because of his own political funding scandal and the departure of the Social Democratic Party (SDP), a junior coalition partner, over the issue of the US military presence on Okinawa.

Hatoyama also asked Ichiro Ozawa, the powerful secretary general of the party, to resign over his funding scandals. Hatoyama said Ozawa accepted his request.

The DPJ is to hold a general meeting Friday to decide the next leader. This is tantamount to picking a prime minister as the DPJ has a majority in the powerful lower house, which chooses the premier.

Hatoyama's resignation only eight months after taking office comes amid a steady decline in approval ratings for his cabinet and mounting calls for him to step down within the DPJ, especially from those members who are to contest an upper house election in July.

Hatoyama's flip-flop on the issue of the US military presence on Okinawa, an island in southern Japan, helped erode his popularity, analysts said.

Before last year's election, Hatoyama told Okinawans repeatedly that he would not let another US military base be built on the island, but last week his government agreed to a US request to relocate a base on Okinawa to a less-populated area of the island despite local opposition.

The SDP decided to leave the three-party governing coalition Sunday after Hatoyama reneged on his campaign promise.

The premier Friday dismissed Mizuho Fukushima, the SDP leader, as minister of consumer affairs and gender equality, after she refused to approve an agreement over the relocation of the US base.

The DPJ won a historic landslide victory in the August general election, ending more than a half-century of almost uninterrupted rule by the Liberal Democratic Party.