Japan CPI In August: Updated Sept. 22, 2025.

Japan's CPI in August rises 2.7% on high food prices

Article source: https://mainichi.jp/english/articles/20250919/p2g/00m/0bu/007000c

Ideas

The pace of increase might have slowed but for sure food prices are still too high in Japan for many Japanese families and especially the lower-income groups.

Maybe for most middle-class families the price of food is too high too but for the upper-middle class they might not notice the high food prices too much depending on the what they buy.

And definitely the fixed-income groups living from month to month on their pensions food prices are just too high at they have to use even more of the total income to buy for food.

The Japanese government needs to find a way to keep energy prices to a reasonable level and or find a way to get some energy trade agreements that can ensure normal prices for coal, gas, and oil as Japan, unfortunately, is a resource-poor county and has to import much of what it needs.

Subsidies are both a positive and a negative as someone gains from the subsidies and someone has to pay for the subsidies.

The average Japanese family of course gains from the subsidies by paying less but again, either the importers, the wholesalers might not get the benefit of the subsidies and usually the government might pay for the difference between the actual cost of the energy and what the subsidy offers which means the government debt could increase even more.

Core CPI is probably still too high for most Japanese families even though it has decelerated in recent months. It should be remembered that its possible that it has decelerated by government of intervention with subsidies and not because of normal market activity.

Again, government subsidies might be needed help, but they can't be relied to fix everything in a economy where prices might be too high or out of control, as too much government intervention in a market economy disrupts the normal flow of economic activities.

Japan has had continued inflation its seems since the pandemic and it hasn't subsided that month except for maybe in the past few months, but at the same time its probably still too high for most Japanese consumers.

Prices for food, excluding fresh items, might be most processed foods might have to be imported which means they are subject to a weak Japanese yen, which means the price of processed food might be too high.

And then there is the global challenge of chocolate and coffee beans which are seeing prices globally at or near all time highs in most economies.

Rice is a major staple for the average Japanese diet and its strange that rice prices became almost out of control for a year and whomever were unable to control the price of rice in the local supermarkets and stores.

You would think, with rice being such an import food product in Japan that again, whomever, would keep it under control with the supply always be enough to not cause shortages in stores or supermarkets.

Eggs are a product that is always subject to either the weather and or animal diseases and challenges which can affect supply and demand of the product.

There are some food products, if possible for the good of society, that should not be subject to the challenges of supply and demand and if possible, the prices should be kept steady with both government and the market finding ways to keep foods such as eggs, milk, bread, rice, and some meat at levels that all families can afford.

Service companies usually have very thin profit margins which means they have very little room related to increases in material costs, energy costs, and especially wage increases.

And most likely service type companies are the first to increase prices and or pass-on their cost to the next in the supply chain which usually means the final retail customer.

Government subsides are good and might be needed in cases where the market is unable to control the price of some products or commodities such energy prices to due external factors.

But they should be used sparingly, if possible, as not to disrupt the normal flow of a market economy as subsidies can distort what is actually happening in an economy over the long term if used too long.

Most central banks, including the Bank of Japan prefer to keep inflation around 2 percent as most feel 2 percent is where the economy is moving at a good rate of flow and if inflation is too low it might indicate there is not enough economic activity in an economy and if its too fast it might mean an economy is moving too fast as might be considered and over-heating economy.

Have a nice day!