The development came just under a year after Suga took office and as his ruling Liberal Democratic Party prepares to hold its presidential election on Sept. 29, with campaigning starting on Sept. 17, Kyodo News reported.
"I had planned to run, but dealing with both COVID-19 and the election would require an enormous amount of energy. I decided that there was no way to do both, that I had to choose," Suga told reporters, adding, "I decided to focus on coronavirus measures."
Tokyo stocks extended their gains after the news reports, with the 225-issue Nikkei Stock Average gaining 524.99 points, or 1.84 percent, from Thursday to 29,068.50 as of 1 p.m.
Suga was quoted by a participant at an extraordinary meeting of LDP executives held earlier in the day, as saying he will serve out his term through Sept. 30.
Facing low public support, Suga has been planning to reshuffle party executives as well as his Cabinet lineup ahead of the party contest, including replacing LDP Secretary-General Toshihiro Nikai, the party's No. 2 leader of five years.
Nikai said Suga has not named a successor and the LDP leadership race will be held as scheduled.
The contest, which will now choose Suga's successor, comes ahead of a general election that must be held as the House of Representatives members' term expires on Oct. 21.
Former Foreign Minister Fumio Kishida has already thrown his hat into the ring, while Sanae Takaichi, a former minister of internal affairs and communications, has expressed interest in running.
Kishida said Friday his intention to run in the party leadership race is "unchanged."
RHM/PR