The Yomiuri newspaper reported on Friday that Britain had told Japan that foreign forces in the south would soon hand over responsibility for security to the new Iraqi government.
But Shinzo Abe, Japan's chief cabinet secretary, told reporters he was unaware of any decision on a specific date or place for the transfer of responsibility for security.
The Yomiuri said that after receiving information from Britain, Tokyo was considering announcing a decision later this month to withdraw its non-combat troops from the southern Iraqi city of Samawa.
"I can't confirm these reports because essentially, first and foremost this is a matter for the Iraqi government," said a spokesman for Tony Blair, the British prime minister.
"But the way this would work would be that the Iraqi government would decide when it is ready to take over a province, the authority would be taken by the Iraqi authorities and then gradually that would affect troops numbers," he added.
He said the process would probably take weeks, but did not know when it would start.
Kyodo news agency reported that Koizumi could announce the withdrawal of Japanese troops as early as Wednesday.
While declining to confirm the reports on the timing of the troop withdrawal, Taro Aso, the foreign minister, said the security situation in Iraq was improving.
Koizumi: Japan will check with UK
and Australia before pulling out
"With respect to whether we can withdraw [our troops], I somehow think that we are getting to a situation where we can do that early," Aso said.
The Japanese military's riskiest dispatch since the second world war has won praise from close ally Washington but is opposed by many voters.
Junichiro Koizumi, the prime minister, has repeatedly said Japan would have to carefully consider the situation in Iraq before deciding to pull its troops out, and that co-ordination with Britain and Australia - whose forces have been providing security for the roughly 550 Japanese ground troops - was needed to decide the timing.
Japanese troop activities are limited by the country's pacifist constitution.
Meanwhile, Lorenzo Forcieri, Italy's junior defence minister, said his country will complete the withdrawal of its troops from Iraq within four months.
"In three months, four at the most, all the Italian troops will have returned from Iraq," Forcieri was quoted by the Ansa news agency as saying during a visit to Malta.
Prodi: US not happy but will
understand once Italy explains
Romano Prodi, the Italian prime minister, has said the whole of the Italian contingent, once the fourth largest in Iraq, will be pulled out by the end of the year.
On Wednesday Italy began a further reduction of its troop strength, which will be down to 1,600 men by the end of June.
Forcieri said the precise timetable for withdrawing Italian troops was a "technical" matter.
"The military is in the process of deciding, but we are talking about three, four months for the complete withdrawal of our troops," he said.
US not happy
Prodi's predecessor, Silvio Berlusconi, strongly backed the US-led war in Iraq, and sent 3,200 soldiers to the southern Nasiriyah region.
They were slimmed down in September 2005 and again in January this year.
Speaking on the margins of an EU summit in Brussels late on Thursday, Prodi said the US was not happy about the withdrawal but will accept the decision when it is fully explained to them on Friday.
Massimo D'Alema, the Italian foreign minister, was to meet his US counterpart Condoleezza Rice in Washington on Friday.
"I don't say that the Americans are happy, but I am convinced that the explanations which Massimo D'Alema will give will be accepted, because they are consistent," Prodi said.