TOKYO, August 4, 2008 (AFP) - Japanese Prime Minister Yasuo Fukuda on Monday ordered his new economy minister to draw up a package of measures to shore up economic growth and ease the pain of soaring oil prices.

'As Japan is facing economic difficulties, I think the prime minister realises that the government needs to take all possible preemptive action,' said Economic and Fiscal Policy Minister Kaoru Yosano.

'I will draw up a framework of new measures by the middle of this month,' he told reporters after meeting Fukuda.

The steps, aimed at tackling slowing economic growth and rising oil prices, are expected to include support for small businesses and farmers.

Fukuda reshuffled his cabinet Friday in a last-ditch effort to revive his waning public support, vowing to revitalise Asia's largest economy and to fight higher commodity prices.

'I will firmly take emergency measures for people who are seriously affected by abnormal oil prices,' the prime minister said Saturday.

The popularity of the 72-year-old centrist has plunged since he took over last September, with voters feeling worse off because of rising global oil and food prices.

Japan has already unveiled measures to ease the burden of high oil prices, including a 74.5 billion yen (690 million dollars) package announced last week to help fishermen, who have held strikes to protest soaring fuel costs.

Resource-poor Japan relies heavily on imports of crude oil, the price of which has doubled over the past two years and risen five-fold since 2003.

Newly-appointed Finance Minister Bunmei Ibuki said Monday the country's economy may have slipped into stagflation -- slowing growth accompanied by rising inflation.

'Looking at the current state of the economy, there are some signs of cost-push stagflation,' Ibuki told reporters.

'The rising prices of natural resources overseas are causing the costs of resources to increase in Japan, but companies here are having difficulties passing along' the price increases to consumers, Ibuki said.

- Dow Jones Newswires contributed to this story -