Japan Core Consumer Prices: Updated Nov. 26, 2025.

Japan's core consumer prices in October rise 3.0% on year

Article source: https://mainichi.jp/english/articles/20251121/p2g/00m/0bu/021000c

Ideas

Ever since the pandemic, or around there, inflation has continued to increase on a yearly basis and doesn't seem to be decreasing anytime soon.

Most likely, the upper classes in Japan never worry about food costs but the lower and middle income groups for sure feel the increase in prices every time they go to the supermarket, which is almost daily in Japan.

The Japanese yen, has been on a downward spiral or in the weak currency range for a very long time, which causes import prices to be higher than usual.

Japan is a resource poor country which means it has to import much of what is needs and when the Japanese yen is weak or very weak, again import becomes too high and importers and wholesalers pass-on the high costs to the next in line in the supply chain which could include the final retail customer.

The former Prime Ministers in Japan also tried many times to decrease inflation but no matter what they tried it didn't work as inflation has continued ever since the pandemic period.

There are two types of inflation related to an economy; and the one that Japan is experiencing now is very hard to control and manage, its related to the increase of costs related to energy increases, raw material increases, and labor costs increases. 

This inflation has nothing to do with consumer spending or business spending as it just relates to an increase of supply costs.

The other kind of inflation is much easier to control and it is related to an increase in consumer spending and business spending in an economy. Usually the central bank will and can increase the key interest rate and most times the rate increase will cause consumers and businesses to cut back on on their spending which then over time inflation begins to decrease as other companies begin to decrease their prices. 

Most central banks want to keep inflation around 2 percent as they feel it's a manageable inflation and it shows that an economy is moving fast enough but not too fast.

An economy with inflation at 3 or 4 or even 5 percent might be considered moving too fast, and a central bank will increase the rate to try and slow down the economy to the 2 percent level.

In Japan's case the interest rate being above the 2 percent level is a supply problem with energy prices too high, raw material, including food costs too high and labors costs which are too high due to a supposed labor shortage in Japan where companies have to pay higher than normal wages to attract workers or keep workers.

The problem is most likely that the Bank of Japan's key rate and the US and its key rate are a long way from being equal as after the pandemic, as inflation increased in the US it increased its rate many times over a two or three year period while the Bank of Japan kept its rate almost at zero or below zero which means the variance between the two rates began to get larger and larger, which has had a negative affect on the Japanese yen being very weak for a very long time.

Consumer spending in Japan most likely has been significantly affected by the increase inflation as Japanese consumers continue to cutback on anything they don't need or even want.

But at the same time there is always inflation fatigue which is consumers get tired of not spending and or not doing things in a economy and eventually begin to spend again our of boredom and inflation fatigue. This might have happened during the pandemic or just after the pandemic in Japan as consumer spending did increase right after the pandemic.

The US is experiencing an increase in costs as they call it an affordability crisis which seems to be hitting other countries too globally.

Japan definitely has its own affordability crisis as food prices continue to remain high including the price of rice which has not gone down since the summer of 2024 rice shortage situation, which saw a run on rice in Japanese supermarkets.

Japan, it seems, will potentially always see an increase in prices due to its dependence on importing much of what it needs, as its dependent on global prices as it can't seem to get its weak currency under control which has a huge affect on the yen being weak or strong, and in this case a very weak Japanese yen.

Back in the day or maybe a decade ago or longer, Japanese companies were reluctant to increase prices or pass-on their costs to the next in the supply chain including and especially the final retail customer as they felt they would loose too many customers in the process.

These days, as the profit margins of companies become thinner and thinner they now have no choice but to pass-on their costs even to the final retail customer.

Yes, there are both positives and negatives to a weak Japanese yen, as the Bank of Japan as to weigh both the positives and the negatives and decide which as the most benefit for the Japanese economy.

Its seems at this time, as Japan is heavily dependent on exports, those companies that export seem to have the benefits for a weak yen, while importers seem to be a a disadvantage as the Japanese yen increases the prices of import products, which unfortunately the domestic economy in Japan is experiencing continued increases in prices almost since the end of of the pandemic.

Have a nice day!