Japan Core Consumer Prices: Updated Sept. 7, 2025.

Japan core consumer prices in July rise 3.1% on persistent food inflation

Article source: https://mainichi.jp/english/articles/20250822/p2g/00m/0bu/019000c

Ideas

Core consumer prices in Japan have been extremely high since the pandemic and haven't decrease much since then.

The pace of increase might be slowing down but most likely Japanese consumers can't see it or feel it just yet.

Not to criticize but it seems the Japanese government doesn't seem to be doing much to help the average Japanese consumer other than subsidies on energy prices lately.

For example, in the US and it the EU the US Federal Reserve increased the key rate as a way to try and reduce inflation and the central bank in the EU followed suit by also increase its key rate to try and reduce inflation in the EU.

But the Japan central banks keeps saying or has said in the past that the Japanese economy might be too weak to increase the key rate as there are could be some significant side affects from the rate increase.

Most central banks like to keep inflation around 2 percent, like the Bank of Japan is hoping for, as they feel its a manageable level and also shows there is enough economic activity moving through an economy.

In recent years, many Japanese companies were reluctant to increase prices for fear or either losing customer or alienating too many customers so they often would absorb any prices increase related to energy, or raw materials costs.

But those days seems long gone as company after company are pass-on their increased costs to the next in the supply chain including the final retail customer.

Rice seem to be in a category all by itself as the normal supply and demand actions don't seem to apply to what has been happening to rice prices since the summer of 2024.

Japan is resource-poor country which means is has to import much of what it needs including gas and oil and if global market prices are too high and or the yen is weak import prices to Japan can be very high.

Rice, again, is a major food staple for the Japanese economy and ever since the summer of 2024 the price of rice hasn't seem to follow the normal actions of supply and demand as there seems to be some other actions that are controlling the price of rice in a country that considers rice a very important part of its food supply.

It could be mismanagement, it could be neglect, it could be cartel type actions but so far none of these actions have been given for the continuous high price of rice.

Most likely as the summer moves on most new air conditioners were probably bought in March or April which means that there weren't as many AC's bought later in the summer months, and as the summer moves close to the fall season most likely retail places are reducing prices to clear out the last inventory of AC's for the year.

Service type companies usually have very thin profits margins so if a company had wage increases for their workers they would have passed-on their costs to the next in the supply chain including the final retail customer.

The Bank of Japan, like most central banks are very conservative so they will take their time to see on what to do about curbing rising prices and what the affect of the US tariffs are going to have on the Japanese economy.

As far as the April-June period and the GDP the Japanese economy just doesn't grow that fast as its in a mature phase now for an economy and economic growth doesn't really happen that fast with mature economies unless there some kind of action that might spur some growth which just hasn't happened in Japan for a very long time.

For example the only real economic driver, lately, for the Japanese economy is exports but Japanese exports are going to be less than normal due to the US tariff situation which could reduce exports, maybe not significantly but enough to have an affect on the Japanese economy.

Unfortunately Japan just doesn't have any other economic drivers as its domestic economy just doesn't have to fuel needed to improve economic growth.

Some might say the record surge of foreign tourists into Japan might be the next economic driver for the Japanese economy, but so far, while very good. it hasn't really improved the economy that much yet, as Japan just doesn't see the amount of tourists that countries like Spain and France have at this time.

Have a nice day!