Japan Core Consumer Prices: Ideas Later.

Japan core consumer prices in May rise 1.4%, fuel subsidies slow increase

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TOKYO (Kyodo) -- Japan's core consumer prices in May rose 1.4 percent from a year earlier, government data showed Friday, with subsidies for gasoline prices capping the upside.

The increase in the nationwide consumer price index, excluding volatile fresh food, followed a 1.4 percent rise in April and remained below 2 percent for the fourth consecutive month, according to the Ministry of Internal Affairs and Communications.

Core-core CPI, which strips away both energy and fresh food to reflect underlying price trends, rose 1.8 percent in May.

Energy costs fell 2.5 percent on year, after a 3.9 percent drop in April, as gasoline prices sank 7.0 percent with the subsidies, also helped by the end of a provisional tax on the fuel in December. Electricity bills declined 2.4 percent.

With the Middle East conflict pushing up crude oil prices, the government has been providing subsidies to oil wholesalers since mid-March to keep the average retail price of gasoline at around 170 yen ($1) per liter.

Prices for food, excluding fresh items, climbed 3.5 percent in the reporting month, decelerating from a 4.1 percent increase in the previous month, with inflation slowing for the 10th straight month.

Rice prices saw a 4.9 percent drop, turning negative for the first time since November 2022, the ministry said. Although prices have remained elevated, growing stockpiles are helping to contain increases.

Exterior paint costs, meanwhile, jumped 4.7 percent amid higher raw material prices.

A ministry official said it is difficult to determine whether any of the price movements can be directly attributed to the Middle East situation.

The Bank of Japan lifted its key interest rate to a 31-year high of 1.0 percent earlier this week. The CPI data is among the materials considered by the central bank in determining whether to hike its policy rate to sustainably achieve its 2 percent inflation target.

Article source:  https://mainichi.jp/english/articles/20260619/p2g/00m/0bu/012000c

Food Prices in Japan: Ideas Later.

Chicken prices hit record high in Japan, forcing changes to bento menus

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TOKYO -- As prices for a wide range of foods continue to climb across Japan, chicken and eggs -- long regarded as affordable staples for budget-conscious consumers -- have also remained stubbornly expensive.

The Ministry of Agriculture, Forestry and Fisheries said June 16 that the average retail price of chicken thighs in June was 155 yen (about $1) per 100 grams, the highest level since comparable records began in 2003.

The rise in chicken prices has forced a growing number of restaurants and food manufacturers to either change their menus or raise prices. Many would rather avoid altering signature offerings for fear of losing customers, but for some, that is no longer an option.

Forced menu changes

"We couldn't raise prices, so we decided to replace ingredients."

That is how a spokesperson for Kiyoken Co., a food company based in Yokohama, described the situation.

The company partially changed the side dishes in its "Yokohama fried rice" bento on June 1. The meal sells for 890 yen (about $5.60), including tax.

The bento, popular among women and children, contains small portions of side dishes including shumai dumplings, simmered bamboo shoots and other items. But after chicken prices surged, Kiyoken replaced one of its most popular side dishes -- chicken in chili sauce -- with shrimp in chili sauce. It was the first menu revision in about 20 years.

Kiyoken had been using imported chicken from countries including Thailand. But "around March, when the situation in the Middle East worsened, we started seeing chicken prices rise," the spokesperson said.

The company had already raised prices for all of its bento products in February. Seeking to avoid further price hikes, it opted to change the ingredients instead.

An 86-year-old Yokohama woman who purchased the bento said she was surprised by the change but added, "It might be tasty with shrimp too," expressing understanding for businesses struggling with rising ingredient costs.

A 69-year-old woman from Tokyo's Toshima Ward sighed as she said, "My son works out and prefers chicken dishes, but chicken has become so expensive that I compare supermarket flyers and buy it wherever it's cheapest."

"Apart from ingredients, many other items, including packaging materials, are becoming more expensive," the Kiyoken spokesperson said. "Combined with the impact of exchange-rate fluctuations, we continue to feel the heavy burden of overall purchasing costs."

The company said it would continue seeking new chicken suppliers, including domestic producers, while weighing factors such as cost and quality.

Kentucky Fried Chicken Japan Ltd. raised the price of its flagship "Original Chicken" to 330 yen (about $2.10) per piece, including tax, in May. The increase marked the fourth price hike since June 2022.

So why are chicken prices so high?

Global demand for chicken has been rising amid changing dietary habits and growing health consciousness.

At a news conference following a Cabinet meeting June 2, Agriculture Minister Norikazu Suzuki said that rising demand was pushing up imported chicken prices and that some restaurant operators were switching to domestically produced chicken, adding upward pressure to market prices.

Masato Koike, a senior researcher at the think tank Sompo Institute Plus Inc., pointed to another factor.

"The recent situation in the Middle East has also pushed up feed and energy costs, adding upward pressure on chicken prices," he said.

Looking ahead, Koike said demand for relatively inexpensive chicken was likely to strengthen further as beef and pork prices also remained high.

"Chicken prices may remain flat or edge up slightly," he said.

Minister Suzuki said that chicken remained an affordable and indispensable source of animal protein for consumers and that the government would closely monitor supply and demand conditions and price trends to help ensure stable supplies.

Egg prices also remain high

It is not only chicken meat that has become more expensive. Egg prices have also remained high.

The ministry said June 16 that the average retail price of a mixed-size 10-egg pack was 309 yen (about $1.90), matching the record high reached in May.

The Japan Poultry Association said egg prices are likely to stabilize around this summer, when the number of egg-laying hens -- reduced by culls carried out during bird flu outbreaks -- is expected to return to normal levels.

It may take some time before chicken and eggs become affordable again. As inflation continues to strain household budgets, even chicken and eggs are beginning to lose their place as the last affordable staples for budget-conscious consumers.

Article source:  https://mainichi.jp/english/articles/20260619/p2a/00m/0bu/012000c

Japan Trade Deficit: Ideas Later.

Japan logs 378.6 billion yen trade deficit in May, 1st red ink in 4 months

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TOKYO (Kyodo) -- Japan logged a trade deficit in May of 378.6 billion yen ($2.4 billion), its first red ink in four months, government data showed Wednesday, with a preliminary report revealing imports of crude oil plunged over 57 percent by volume amid the Middle East conflict.

The Finance Ministry data underscored progress in the government's efforts to procure fuel from alternative sources, including the United States, but at a higher cost due to added transportation and insurance fees.

Japan purchased crude oil at a record-high price of 114,076 yen per kiloliter, up 67.2 percent from a year earlier, and at $114.6 per barrel, 52.0 percent higher, the data showed, with a ministry official saying the "high" levels likely reflected the change in shipping routes.

It is feared the increased procurement costs for oil will hurt corporate profits and prompt price hikes for consumer goods that use oil-derived materials, analysts said.

The deficit in May shrank 42.8 percent from the year before.

Exports rose 17.0 percent to 9.51 trillion yen on shipments of China-bound semiconductors and U.S.-bound cars, while imports climbed 12.5 percent from a year earlier to 9.89 trillion yen due to purchases of smartphones from China, the report said.

With the Iran conflict disrupting transportation through the Strait of Hormuz, Japan's oil imports dived 57.3 percent to 4.73 million kl, led by a 61.9 percent drop from the Middle East alone, the data showed. The resource-scarce country relied on the region for over 90 percent of its oil imports before the war.

By value, oil imports fell 28.5 percent to 539.2 billion yen, with shipments from the Middle East decreasing 37.3 percent to 445.8 billion yen.

The report showed that Japan's efforts to tap alternative suppliers partially paid off, with crude oil imports from the United States increasing 24.0 percent to 576,000 kl and sourcing from Malaysia and Brunei also progressing, the official said.

Prime Minister Sanae Takaichi said earlier this month that Japan expects to secure the same volume of crude oil imports in July as the year before, after ramping up purchases from non-Middle Eastern suppliers like the United States.

The preliminary data also highlighted continued interruptions in the distribution of oil-related products, most notably naphtha, a raw ingredient of chemicals used in the manufacture of plastics and packaging materials, due to the Middle East conflict.

Japan's total imports of petroleum spirits, of which the bulk is naphtha, from the Middle East fell 90.0 percent to 136,000 kl, the data showed.

The drop was partly offset by supplies from the United States, with the report showing Japan's purchases of 566,000 kl, up 569.6 percent from a year earlier.

The official said it remains uncertain how the recent agreement between the United States and Iran on ending their war will impact Japan's trade with the Middle East.

But it is promising that companies such as automakers continue to view the region as a valuable market despite the conflict, the official said, citing media reports.

Article source: https://mainichi.jp/english/articles/20260617/p2g/00m/0bu/015000c

BOJ Increases Rate. Ideas Later.

BOJ lifts policy rate to 31-yr high 1.0% on heightened inflation risks.

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TOKYO (Kyodo) -- The Bank of Japan lifted its key policy rate to a 31-year high of 1.0 percent on Tuesday, warning of the risk of heightening inflation risks stemming from elevated crude oil prices due to the Middle East conflict and the weak yen.

The central bank, in the absence of Governor Kazuo Ueda who has been hospitalized for medical treatment, raised the short-term interest rate from 0.75 percent in its first hike since December, saying that the recent U.S.-Iran agreement to end the war is a positive development but still leaves uncertainties over the economy.

The bank's rate hike after keeping it steady at the three previous meetings brings its policy back on a normalization track after a decade of unorthodox easing that ended in March 2024.

The BOJ said in its statement that there is a risk of underlying inflation rising above its target of 2 percent as rises in crude oil prices lead companies to hike prices in business-to-business transactions "at a relatively fast pace," which could "spread to an increase in consumer prices across a wide range of items."

BOJ Deputy Governor Shinichi Uchida told a post-meeting press conference that the bank will continue to raise the rate to stabilize inflation at around the 2 percent target, judging that even after the latest hike financial conditions remain accommodative.

Uchida said that one of the major reasons behind the rate hike decision is reduced risks to the economy due to factors such as government measures to secure alternative sources of raw materials including imports of oil from regions other than the Middle East.

Uchida also said that the bank is watching currency moves carefully. On Tuesday afternoon in Tokyo, the U.S. dollar was trading above the 160 yen line, the level where the Japanese financial authorities intervened in the currency market just over a month ago to support the yen.

"We do not target specific exchange rates in guiding our monetary policy, but we engage in policy discussions on the view that currency moves have a crucial impact on economic and price developments," he said.

Among the remaining eight policymakers excluding Ueda who discussed the policy change, the rate hike decision was opposed by Toichiro Asada, who joined the Policy Board in April and is viewed by the market as a proponent of reflationary policies and in favor of aggressive monetary easing.

In another policy change, the bank said it will pause the plan to reduce Japanese government bond purchases from the next fiscal year starting in April, at a time when long-term interest rates have been rising rapidly.

It will keep the current pace of reducing monthly purchases by about 200 billion yen every quarter for rest of this fiscal year, which would result in buying of around 2.1 trillion yen ($13 billion) per month in the last quarter of fiscal 2026.

But from April 2027 onwards, the bank will no longer reduce but steadily buy about 2 trillion yen a month under the new plan, citing the need to stabilize the bond market.

The BOJ decided in July 2024 to cut back its monthly government bond purchases as part of its efforts to normalize its monetary policy.

While raising the key policy rate could cool the economy by increasing borrowing costs for companies, restraining investment and dampening private spending, the central bank saw the need to respond to inflation risks following the launch of U.S.-Israeli attacks on Iran in late February and subsequent surges in crude oil prices.

The yen repeatedly falling to the 160 zone against the dollar, despite the Japanese authorities intervening in the currency market from late April to early May to curb the unit's fall, has also stoked concerns about rising import costs for resource-poor Japan.

Even if the U.S.-Iran conflict ends following the two countries' agreement to end the monthslong war, shipping through the Strait of Hormuz may not immediately stabilize, keeping transport, raw material and other costs elevated, analysts said.

But the agreement will relieve fears of disruptions in Japan's supply chains, serving to reinforce the view that the economy is resilient enough to withstand further rate hikes, they said.

The decision to raise the rate puts the BOJ in line with other central banks shifting toward tightening of monetary policy amid inflationary pressures, such as the European Central Bank, which hiked its rate last week.

The two-day policy meeting was chaired by BOJ Deputy Governor Ryozo Himino, after Ueda was hospitalized to treat a hepatic cyst infection. Ueda's hospitalization is "short and there will be no significant impact" on the BOJ's steering of monetary policy, Uchida said.

Inflation risks have been flagged after Japan's wholesale prices rose 6.3 percent in May compared to a year earlier -- the biggest increase in over three years. Firms are increasingly passing on rising costs from the war in Iran to the prices of their goods and services.

The data suggested that core consumer inflation may also accelerate, although it has been kept below the bank's 2 percent target because of government subsidies for electricity, gas and gasoline, the analysts said.

Article source:

https://mainichi.jp/english/articles/20260616/p2g/00m/0bu/014000c

Japan Big Company Sentiment: April- June Gtr. Updated June 15, 2026.

Japan big companies' sentiment sours in April-June qtr, hurt by Iran war.

Ideas

Business sentiment in most advanced and emerging economies is an very important economic indicator as it can drive stock markets, not just in one country but globally too if news comes out that Japan's business sentiment is down or even the US stock markets and globally can react negatively to the news.

Japan's economy is still an important economy globally as its still ranked among the top five economies in the world and as such most stock markets watch what is happening in Japan on a daily level, if not weekly, or even monthly.

Over the past several decades, business sentiment in Japan hasn't been that great as, for the most part, Japan has been mired in a stagnant economic phase that it hasn't been to be able to get out of, and maybe this is just another phase of the stagnation phase that the Japanese economy is in.

The Japanese economy, unfortunately, is very much a global export driven economy which means it relies heavily on the global economy and whenever there are disruptions, like now with the Middle East situation, it can easily have some economic shocks that disrupt the normal flow of the economy.

Japan is very much a major manufacturing economy still even though most of the economy is now based on services and technology but there is still a major manufacturing presence and the export side of the economy is heavily manufactured based.

As such, again any disruptions in the global economy can be a major challenge for many Japanese companies as a result companies can easily become disillusioned with what is happening and may find the global conditions not to their liking which means they might reduce hiring, reduce manufacturing and so on and then there is the idea of the increase in global prices which can affect Japanese companies significantly.

Business sentiment is like the stock market in that some or many companies can easily react negatively to whatever is happening not only in Japan but globally too as companies in Japan are constantly watching the global economy very carefully and for most companies, unfortunately, they don't have any real mechanisms to try and ride out any disruptions as again most companies seem to react instead of responding in a way that shows that it has taken a long term view of the situation and is not going to react negatively which can be cause challenges for its company.

Yes even non-manufacturers in the Japanese economy are feeling the affects of the increase of global prices and even in most sectors in Japan, the increase in raw material prices, the increase in wages and labor costs are affecting many companies both large and small.

It should be remembered that over 97 percent of most Japanese companies are small and mid-size companies and not the name-brand companies that always seem to be in the news. As such what happens to most small and  mid-size companies never hits the news and no one really knows or even cares, for the most part, what is going on with the small companies.

Again, while the index is an important and significant measurement to know what companies might be feeling or thinking about the Japanese economy and even more about the global economy it might not represent every company in Japan as a survey of 10,000 companies, while relevant is not every company in Japan an there might be just some companies who don't see or feel the same as the large companies do and or maybe some in different sectors of the economy might not see things the same way, so the survey, while important should always be taken with some kind of grain of salt.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260611/p2g/00m/0bu/016000c

Japan May Wholesales Prices: Updated June 15, 2026

Japan's wholesale prices up 6.3% in May, fastest rise in over 3 years

Ideas

For many years, Japanese companies both retail and wholesale were reluctant to increase prices and or pass-on their prices to the next in the supply chain including the final retail customer as they valued their relationships with their customers and tried to absorb their costs as much as they could.

But those days seem long gone, as material costs increase, the pressure to increase labor or wage costs continue to increase as companies, these days, feel they have no choice but increase costs and now, for some or many its survival in the marketplace.

Yes, it appears, all the pieces are falling into place for the BOJ to increase its key policy relate as a preventive measure to try and reduce inflation like many countries do when their inflation increases beyond what a central bank thinks it should be.

Most central banks prefer to see inflation at around 2 percent as they feel its a manageable level and many central banks thinks at that rate a country's economic activity is at a good level for the economy.

And again, if the BOJ does increase the rate to 1.00, even though there might be some negative side affects, to be sure, the BOJ has considered what the side affects will be and have taken into account how much the Japanese economy will be affected by the rate increase.

There is no real guarantee that the rate increase will slow inflation or even have a significant effect on inflation as a rate increase, for the most part,, is just a prescription like in medicine and sometime prescriptions work immediately and sometimes they take a while to work.

Yes, the wholesale price increases are usually delayed before they begin to affect consumer prices or retail prices as some companies might pass-on their increased costs immediately and some might wait and some might only pass-on parts of the price increase a little at a time to not cause too much stress to the final retail customer.

For a very long time, it appeared that BOJ in dealing with inflation was taking a hands-off approach and maybe was hoping the inflation would naturally decrease as some have suggested the BOJ felt the Japanese economy was just to weak to increase the key rate as their would be too many significant side affects affecting the economy.

As Japan is resource-poor country it depends on imports from many parts of the world, and whenever there are major disruptions in global supply chains Japanese can feel it as prices will go up and it takes sometimes up to six months for prices to decrease, if at all.

Japan is smart to look for alternative sources and it should not be an emergency situation to keep alternative sources close as there as recently there have been major disruptions in global supply chains since the covid situation, and as Japan's currency is very weak import prices to Japan are going to continue to be very high.

Japanese households have been stressed out by the increase in prices almost since the pandemic started and it doesn't look like it's going to change anytime soon in the future.

As a result Japanese households disposable income has been reduced which means less spending in the economy which of course means less economic growth.

The Middle East is more than just gas and oil and there are many more products coming out of that region and prices will continue to be high even after the situation calms down as prices and supply chain disruptions just don't go back to normal as it going to take months to everything back to some kind of normal.

And then, as has been seen previously, unfortunately, companies will try to keep prices high until they have re-couped what they might have lost due to the Middle East situation, as is evidenced during and after the pandemic with many airlines keeping prices high to get back their lost earnings.

Yes, the Middle East situation is affecting all up and down the global supply chain ecosystem and it doesn't look like it going to end anytime, as again, its going to take months to get the supply chain ecosystem back to some kind of normal and again its not going to happen overnight.

Companies, unfortunately, are  for the most part, only think about their current situation and the situation in how it affects their shareholders, and don't really think that much about the final retail customer, especially if the products they produce or buy in the Middle East is related to B2B type products or company needed products and not normal consumer type products.

Yes, again, companies, especially in the short term only think about their profits and usually don't think about the big picture which includes, or should include, shareholders, employee stakeholders, and the retail customer.

Once again, in years past, and now maybe many years past, Japanese companies were reluctant to pass-on their increased costs to the next in the supply chain and including the final retail customer, as they felt their relationship with customers were an important element of doing business and not just to make a profit, but those days may be long gone, for many companies in Japan now.

It must be remembered, that the Japanese yen is currently very weak which increases the price of imports into Japan and then add on the disruptions in the global supply chain and that too increases the price of most if not all import products coming out of the Middle East.

And exports are not exempt from prices increase related to raw material costs, increases in labor costs, and so on as export companies will increase their prices too as needed to protect their profits margins and then there is the continued situation with global supply chains and the increase in shipping that saw a significant increase in costs during the pandemic and the increase continues today.

Have a nice day!

Article source:  https://mainichi.jp/english/articles/20260610/p2g/00m/0bu/017000c

Japan Economy in Jan.-March: Ideas Later.

Japan's economy expands 1.8% in Jan.-March, revised down

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TOKYO (Kyodo) -- Japan's economy expanded an annualized real 1.8 percent in the January-March quarter, revised down from an initially reported increase of 2.1 percent as capital investment slowed, government data showed Monday.

It marked the second consecutive quarter of growth, but many economists believe the prolonged Iran war will likely weigh on the Japanese economy in the April-June quarter by fueling inflation, weakening private spending and disrupting supplies of petroleum products.

Real gross domestic product, adjusted for inflation, grew 0.45 percent from the October-December period, down from a preliminary reading of 0.51 percent, a Cabinet Office official said.

GDP is the total value of goods and services produced in a country.

In the latest GDP data, capital spending fell 0.7 percent in the three months through March, revised down from a 0.3 percent increase, as investment in software and production machinery was weak.

A Cabinet Office official said the downward revision reflects separate government data on business investment by Japanese companies in the quarter, adding the impact of the Middle East conflict on the data was unclear.

Public investment was upgraded to a 1.5 percent rise from a 1.4 percent increase.

Private consumption, which accounts for more than half of GDP, grew 0.35 percent in the quarter, revised up from the preliminary 0.27 percent, helped by robust outlays for dining and spending on games, the official said.

Housing investment was revised upward to a 0.9 percent rise from the 0.5 percent increase reported earlier.

Exports rose 1.8 percent from the previous quarter, revised up from a 1.7 percent climb, supported by a recovery in auto shipments bound for the U.S. market. Imports were downgraded to a 0.4 percent increase from a 0.5 percent rise.

GDP was pressured 0.1 percentage point by a reduction in private inventories, apparently due to the government's decision to release oil from stockpiles, starting with those held by the private sector.

"Growth in the April-June quarter is forecast to hover around zero," said Yoshiki Shinke, senior executive economist at Daiichi Life Research Institute Co., noting the biggest concern is the adverse impact of supply uncertainty and procurement difficulties amid tensions in the Middle East.

The conflict has disrupted the supply of oil and petroleum products to the resource-poor country amid the effective closure of the Strait of Hormuz after the United States and Israel launched attacks on Iran on Feb. 28.

Prolonged tensions could hit Japan's exports bound for the Middle East, while concerns are heightening that elevated crude oil prices would drive up inflation.

To brace for the impact of rising energy costs, Japan's parliament on Friday enacted a 3.11 trillion yen ($19 billion) supplementary budget for this fiscal year that marks the government's first fiscal spending package in response to the Middle East crisis.

Nominal GDP expanded at an annualized rate of 2.5 percent, revised down from a 3.4 percent gain reported earlier.

Article source:   https://mainichi.jp/english/articles/20260608/p2g/00m/0bu/008000c