BEIJING, SEPT. 25 -- President Li Xiannian today gave the strongest indication to date that China's new prime minister will be Vice Premier Li Peng, a 59-year-old technocrat regarded as more of a traditional communist than other candidates for the job.

Japanese sources, reporting on a meeting today between President Li and a Japanese delegation, said Li singled out the vice premier as a man headed for a top leadership job. Some analysts took this as an unmistakable sign that Li Peng is destined for the premiership.

"Li Peng is a very young man, a man of ability," said Li Xiannian, according to the sources. "He is not yet 60. From now on, you should associate with Li Peng and with other new leaders."

The sources also said Li informed the Japanese delegation that, after a Communist Party congress to convene on Oct. 25, he will retire from the presidency and the powerful five-member standing committee of the Politburo.

Diplomats and analysts here and in Hong Kong had said earlier this week that all signals now point to Li Peng's appointment as premier in either a permanent or acting capacity early next year, if not sooner. The current premier, Zhao Ziyang, also has been acting Communist Party chief since the ouster of Hu Yaobang from the party post last winter, and Zhao is expected to give up the premiership to concentrate on running the party.

The diplomats and analysts said senior Chinese officials had reached a compromise over top leadership changes to be endorsed at the forthcoming party congress.

Under this compromise, traditionalist party elders, apprehensive about the economic reforms introduced by senior leader Deng Xiaoping, are said to have retained a number of key positions. Some of these elders, such as economist Chen Yun, are said to favor the appointment of Li Peng as premier.

However, Li Xiannian is reported to have told the Japanese delegation that China would not depart from its reforms or from its open-door policy toward the outside world.

Li Peng is a Soviet-trained hydropower engineer with ties to many elderly party leaders. His past remarks have suggested that he is less enthusiastic than acting party chief Zhao about creating a market-oriented economy.