Japan Households and Prices:

 Article Source: https://mainichi.jp/english/articles/20220626/p2g/00m/0na/006000c

Article:

TOKYO (Kyodo) -- Japanese households are becoming increasingly less tolerant of surging prices of food and daily necessities, according to a recent analysis of Bank of Japan surveys by a research company.

The Mizuho Research & Technologies Ltd. analysis of the household spending surveys runs counter to BOJ Governor Haruhiko Kuroda's remark in early June that consumers had become "tolerant" of rising prices.

Ideas:

It's unfortunate that Japanese households/consumers have become less tolerant of the incease in prices. 

Part of the problem is Japan has maybe for too long gotten used to lower prices and now as prices are increasing they can't see why prices have to increase. 

It might be both a psychological challenges and of course a budget challenge as most consumer probably haven't received a wage increase for a very long time.

Which means they are living on less because of the increase in prices and they have less extra income to spend.

Article:

Kuroda was later forced to retract it and apologize following a backlash from the public.

The company also found a growing tendency to cut back on expenses for food and beverage.

Using data from the BOJ quarterly surveys, Mizuho Research quantified households' tolerance by subtracting the percentage of respondents who considered price hikes "troubling" from those who perceived them as "desirable."

Idesa:

Its logical that consumers are cutting back on expenses. As Japanese consumers for too long maybe have gotten used to lower prices they might not want to spend as much as before. 

But hopefully maybe Japanease consumers will get back and continue to spend for the good of the economy.

The idea that anyone gets used to higher prices is not correct but even if consumers don't get used to the idea of higher prices they might reluctantly get back out and spend agian.

Maybe not as much but consumers and spending is an activity that is inherent in consumers and whether they like it not they might begin to get out there and spend.

Article:

The analysis of tolerance progression between June 2004 and March 2022 showed households' tolerance for rising prices markedly decreased from the second half of fiscal 2021 when surges in oil prices became salient.

Tea bags, futon bedding, air conditioners and cooking oil were among the items that consumers significantly cut back on, the company said, citing its separate analysis based on government statistics such as the consumer price index and the household expenditure survey.

Ideas:

Yes, as prices continue to increase consumers may over time begin to feel less tolerant toward higher prices and begin to cut back or find subsitutes.

But at the same time that might not be all consumers as some consumers may relunctantly continue to buy and spend despite the hgher prices.

Everyone has a different tolerance level. and even though prices might be increasing some some products they like they might still continue to buy them.

We can't say all consumers are the same as each consumer has differnet likes and dislikes in products and services. So its not always easy to lump all consumers into the same buying behavior category.

Article:

Saisuke Sakai, senior economist at Mizuho Research, called attention to the disproportionately high burden rising prices place on low-income households.

"They are less tolerant of price hikes as daily necessities make up a bigger proportion of their spending," compared with their better-off peers, Sakai said.

Ideas:

Yes, the low-income groups are really burdened now because of maybe the increase in eggs, bread, milk, rice and so that they need everyday and everyweek.

So the Japanese government, to help low-income households, needs to find ways to help them through this period. Either with subsidies that these households can get at government centers and or put prices controls on some products to ease the burden of low-income houesholds.

And the Japanese government should make the distribution of food subsidies as pain-free as possible and not make the process too challenging with a lot of un-needed paperwork becuase many or some might not take advantage of the governmen subsidies related to buying food.

Have a nice day and be safe