Japan's Core Consumer Prices: Updated July 24, 2025

Japan's core consumer prices in June rise 3.3% on year

Article source: chttps://mainichi.jp/english/articles/20250718/p2g/00m/0bu/018000

Ideas

Japan is a resource-poor country which means it has to import much of what it needs which also means its subject global price fluctuations related to shipping costs, raw material costs, and of course food price increases.

And then there is the problem of Japanese wholesalers or middle-men who add onto the import price to get their share needed to make a profit, which means the final Japanese customer has to pay a lot.

It's highly unlikely, in the near future that inflation in Japan will decrease below the 2 percent level any time soon unfortunately.

The pace of increase might be slowing some, but its still too much for the average Japanese household which means they have less and less disposable income each month and can't spend much in the Japanese economy.

The higher costs for mobile phones might be attributed to the I phone being very expensive globally including Japan and the entrance of South Korea's Samsung smartphones and the rise of Chinese smartphones too.

The Japanese rice situation is a disaster at this point as it's been on-going since the summer of 2024 with no real end in site yet.

Rice is a major staple in Japan and in Asia and should never be as expensive as it is. Food staples such as rice, bread, milk, some vegetables, and maybe some kinds of meat should never be so expensive that the lowest income groups should be able to buy these products easily instead of having to fore-go them because of price increases.

The rice situation or crisis in Japan is a national tragedy and never should have happened. This could be a situation where there might be the workings of a cartel type situation that is controlling the price of rice in markets as a way to benefit certain groups in Japan.

Rice prices might have peaked but prices are far from being back to normal and there are too many middlemen in Japan and the rice market is a very complicated web which makes pricing extremely difficult to back to some kind of normalcy.

Yes, prices continue to remain high which again means less disposable income for Japanese families which of course means less spending overall in the Japanese economy which of course reduces the chances for economic growth in the Japanese economy.

Energy prices are subject to global fluctuations as again Japan is a resource-poor country and has to import much of the energy it needs and then of course there is importers or middlemen group who need their share of the profits which increases the price of the energy being imported into Japan.

Japanese government subsidies help but the Japanese economy can't live on subsidies alone as some groups have to pay for the energy subsidies somewhere along the way.

The Bank of Japan is very conservative like other central banks but will look at the data very carefully and as usual will not make an rash decisions on what do to as they don't want to upset the financial markets with anything too risky.

Service companies were hit very hard during the pandemic and many had to lay-off workers and now they are experiencing a shortage in the labor market and they have to increase wages in order to keep or attract workers to work for them, like many companies are experiencing now in Japan.

Service companies are very quick to pass-on their costs as service companies have very thin profit margins and can't afford to absorb any costs such as energy costs, material costs, wage increases and so on.

Have a nice day!