Prime Minister Shigeru Ishiba is preparing a fresh stimulus package for Japan's economy that includes subsidies for utility bills and cash handouts to low-income households, government source said Friday, following his ruling coalition's defeat in the recent general election.

On the same day, the coalition led by Ishiba's Liberal Democratic Party began policy talks with the Democratic Party for the People, raising expectations that he may incorporate views of the opposition party in the package and seek its support in managing the House of Representatives, where his coalition lost its majority.

At the forefront of the DPP's policy push is boosting incomes amid rising prices, including by raising the current 1.03 million yen threshold for people to start paying taxes.

The stimulus package comes as rising energy and other costs have been affecting households. The government plans to respond by reintroducing subsidies for electricity and gas bills and extending those aimed at curbing gasoline prices beyond the year-end deadline, the sources said.

It will also make clear that Japan will promote "maximum utilization" of nuclear energy while ensuring safety, according to a draft of the package, which says the country must reshape its economy to better withstand rising oil and other energy prices.

Japan depends on imports for most of its energy needs.

Ishiba also looks to offer cash handouts to low-income households under the serious impact of higher food and energy prices, although details such as their amount as well as the income level of possible recipients have yet to be worked out, the sources said.

Under the package, the government will also likely mention its plan to study legal and financial steps to support the mass production of next-generation semiconductors, they said.