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!

Editorial: Updated Nov. 16, 2025.

Editorial: PM Takaichi's gov't must collaborate with BOJ to stabilize prices, fix weak yen

Article source: https://mainichi.jp/english/articles/20251114/p2a/00m/0op/022000c

Ideas

The variance between the US key rate and the Japanese key rate as been there for a very long time, as Japan at one time said the Japanese economy is too weak to increase the rate while the US increased it rate many times after the pandemic had subsided to combat inflation.

As a result the Japanese yen has continued to be weak which has put a lot of pressure on imports, importers, Japanese businesses, and Japanese consumers.

The Bank of Japan has known for a long time it needs to increase the key rate but the BOJ is a very conservative group and they don't make changes very quickly.

They have increased the key rate a few times recently but to get the yen stronger they need to raise more in line with the US dollar.

Japanese wage increases, while needed, are not going to solve the yen problem. A wage increase might decrease the stress on Japanese households slightly, but it's not going to completely fix the situation.

It sounds like the Japanese government is using the approach of letting inflation naturally decrease at its own rate without any BOJ intervention.

There are both positives and negatives for keeping an ultra low interest rate policy and for a while it might have worked for the Japanese economy, but at the same it might not work for everyone in Japan.

The ultralow rate might be good for small and midsize businesses who need business loans to keep from going out of business and or many homeowners who have mortgages as an increase in the key rate increases their home loan payments.

The key rate, as it stands now, is good for exporters as a weak Japanese yen increases profits for exporters but at the same time increases import prices, which is affected the Japanese domestic economy a lot with higher prices than normal, which has reduced consumer spending in Japan.

What the BOJ might be really saying is we know we need to maybe increase the key rate but we are going to take more time to study what is happening, especially with the US tariff situation on Japanese companies and the overall Japanese domestic economy.

At the same time, the BOJ might be listening to what the new Japanese Prime Minister is saying or wanting and holding off on any decision to increase the key rate.

Its important to mention here, that central banks, in a democracy are supposed to be independent of the government or any political party and should follow their own ideas and not the ideas or suggestions of a government.

The Japanese government has never showed away from aggressive fiscal spending and it seems the new government is going to do the same in the future.

The gasoline tax cut is like a subsidy and some will eventually have to pay such oil importers or oil wholesalers and the Japanese government will need to subsidize these groups to make sure they have the needed profits to stay in business, while helping Japanese driver and Japanese households reduce their expenses.

It also must be remembered that Japan has one of the highest debt to GDP ratios in the world which might be 250% of its GDP, which means it's spending way more than what its economy  is producing.

There are always going to be negatives and positives in any economy and fixing the inflation situation or fixing the weak yen situation is going to help some in the economy but at the same time not help some in the economy.

For example, inflation in itself, inflation might be considered not bad and not good too and again, depending on which side of the coin you are on.

For some, inflation might be positive sign that an economy is running a good level and prices are going up as more consumers and businesses spend in the economy.

At the same time if its too high it might a stress for some in the economy and it might actually reduce business and consumer spending.

And the same the the interest rate. While a low rate helps with weaker yen with exporters it can hurt importers with higher prices and affect the Japanese domestic economy too much.

Professor Hamada might be right but he doesn't make the decisions as the BOJ does and maybe the new Prime Minister too will have something say about increasing the key rate.

Conventional or normal central bank strategies has been to increase the key rate as a way to encourage less business and consumer spending in an economy as a way to get the inflation rate down, but the BOJ has resisted such strategies as they have suggested many times the Japanese economy was just too weak to increase the key rate at this time.

The BOJ probably has known for a very long time it needs to normalize its monetary policy but as mentioned before it has taken the approach the Japanese economy is just too weak to increase the rate which would help to normalize the policy.

Improving wages is good and important but its not going to solve everything in the Japanese economy.

For example, there might be a huge variance between wages for large Japanese companies and wages for small and midsize companies in Japan. It is estimated that up to 70 percent of the Japanese workforce work for small and midsize companies, which means, if wages for them are not the same large company wages there could be significant difference in how much large company consumers spend and what small and midsize consumers spending the Japanese economy.

Productivity can be a difficult measurement as to what really is productivity in one company compared to another company. But at the same time, it's known that companies in Japan are not the most productive for whatever reason. 

Some or many Japanese companies are still very traditional and haven't really transformed into modern day 21st companies, as they rely on many of the 20th modes of doing business and long hours and a rigid hierarchy system of management.

Have a nice day!

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!

Japan Core Inflation Slow: Updated June 7, 2024.

 

Japan's core inflation slows to 2.2% in April on food, services

Article Source:  https://mainichi.jp/english/articles/20240524/p2g/00m/0bu/007000c

Ideas:

The pace may have slowed, which of course is good, but when inflation has risen for almost 2 straight years, it can add up for Japanese households and businesses.

The Bank of Japan might want a inflation target of 2 percent, but it hasn't been able to achieve for a very long time. Of course the weak Japanese yen is part of the challenge, as a weak yen increases import prices on many things.

Perhaps the Bank of Japan should have a more flexible inflation target of 2 to 3 percent and that way it might be able to achieve its goal.

The Japanese economy has/was in a state of deflation for many years, if not decades, as consumer demand has not reached its potential, which means companies decreased prices as a way to stimulate demand for their businesses.

At the same time, due to the Toyota decision in the early 2000's not to increase wages. many if not all companies did the same thing, and only the past year as companies finally began to increase wages, which will help the Japanese economy to get out of its deflation situation.

People in Japan has told me that 5,000 yen used to buy a lot at a Japanese supermarket but these days it hardly buys anything at all.

Perhaps, as anywhere, consumer got used to lower prices and as inflation has continued on for a few years, maybe Japanese consumers are still not used to the price increases.

And as inflation has continued each month or near each month, it means the extra income of Japanese households has continued to decrease, which means of course less spending in the Japanese economy overall.

But there is always going to be  subset of any economy which doesn't feel the affects of inflation or the affects of less extra income that they can use in the economy.

Energy prices and maybe overall utility prices are beginning to stabilize and not expected to continue to increase overtime.

The service sector, which is a broad category of many different subsectors, might be increasing prices as a way to makeup for the losses during the pandemic as the service sector was hit the hardest during the pandemic.

At the same time, as foreign tourists pour into Japan, service companies might also be increasing prices due the the increased demand from foreign tourists.

As government subsidies begin to be lost, energy companies no doubt will have to increase prices to keep their profits margins intact.

And as the same time, as the Japanese yen remains weak, that could mean energy import prices too are going to remain high in the future.

Consumption or consumer spending by Japanese households can be both a boom or a bust in the coming months depending on wage increases. If all Japanese companies increase wages then it could be a boost for the Japanese economy, but if only large companies increase wages then it could be the continuation of the haves, large companies, and have nots, small and midsize companies in the future.

Its going to take some time, maybe not until the July-September quarter for the full affect of wages increases are seen in the Japanese economy.

Japanese workers will decide how much to spend in the Japanese economy and how much to save or some combination of both.

There has to be a balance in an economy between savings and spending and too much of either is not good for a balanced economy.

But too, the Japanese economy needs some kind of boost or shot, like a major surge in consumer spending to get over the so-called deflation period that it has been in for maybe three decades.

Have a nice day and be safe!