Japan Consumer Prices

Article Source:

https://mainichi.jp/english/articles/20221118/p2g/00m/0bu/016000c

Ideas:

Japan’s consumer prices continue to increase which means consumers are going to continue to reduce their purchases which doesn’t help the economy grow.

Most consumers only have so much extra income to use in the economy and then they begin to look for less expensive products/services and or they begin to cut back in what they buy.

The Bank of Japan seems to claim that high energy prices and raw material costs are a temporary situation.

But the average Japanese consumer might see it differently as they are the ones having to live with inflation on a day by day basis.

Wage hikes are definitely needed to help consumers but they might be a long time coming and or if there are wage hikes they won’t be enough to satisfy most consumers/workers.

For example with increases of 5.9 percent it’s hard to imagine most companies are going to increase wages 5.9 percent as they have been reluctant to do anything for a very long time.

Prime MInisters Kishida can beg/plead all the wants but companies are not going to do much as they are probably either focused on keeping shareholders happy and or their profit margins are just too thin for any real wage hikes.

It must be remembered that the BOJ’s 2 percent target was/is focused on consumer demand and consumer spending and not the increase in whole prices.

The sharp depreciation of the yen, which has been controlled recently, is still a concern for businesses and consumers and they probably don’t see much change overall.

Consumers and businesses are probably going to take an even more deflationary approach and look for less expensive products in many areas of their lives and businesses.

As inflation continues to cause challenges in the Japanese economy, more consumers are going to reduce spending which is not going to help the economy grow.

Have a nice day and be safe!