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STORY: Japanese Prime Minister Shigeru Ishiba told his ministers to compile a fresh economic package Friday (October 4).

His demand is aimed at helping households cope with rising living costs.

The new prime minister was only sworn in this week, and had previously been seen as a supporter of fiscal austerity.

But he now stresses his new government's top priority is to exit deflation that has weighed down the country for three decades.

Ishiba's move comes ahead of a general election.

“We would need to support people suffering from rising costs right now until a positive growth cycle with wage increases outpacing inflation and driving capital expenditures is established.”

Ishiba told his cabinet on Thursday (October 3) that a supplementary budget would be compiled to fund the package.

It would come after lower house elections due in late October.

He said the fresh package would include payouts to low-income households and subsidies to local governments.

Ishiba also pledged to make efforts to boost the minimum wage by around a half this decade.

He said economic conditions have improved and wages have finally begun to grow after three "lost" decades that focused on cost cuts.

But Ishiba added there was a long way to go before people felt safe to spend.

He also vowed Friday to keep building ties with like-minded nations, including deeper security co-operation with South Korea.

He said he would work with China where possible, while confronting it on issues of disagreement.