A Japanese government report released Saturday claims that North Korea's regime is becoming increasingly unstable due to growing social unrest spawned by rising strife between the communist state’s wealthy and poor classes.

Japan’s Public Security Investigation Agency said in its annual report on domestic and overseas security situations that sweeping economic reforms implemented by Pyongyang in 2002 had caused rapid inflation and a deepening of the wealth divide. The report said that the resultant confusion, including rising theft and robberies in the Stalinist North, was expected to only worsen in the future.

It also said that growing public discontent for the Pyongyang regime may weaken Kim Jong-il's grip on power, leading to internal strife within the leadership over his successor.

The report came a day after a conservative U.S. academic predicted that North Korea would "implode" within a year. Michael Horowitz of the Washington-based Hudson Institute said in a Thursday seminar in Washington that "North Korea will implode before next Christmas and Kim Jong-il shall not enjoy Christmas next year."

Horowitz also mentioned the possibility of a military coup in the North.

Yonhap/KBS