Japan May Core Consumer Prices: Updated June 21, 2025.

Japan's core consumer prices in May rise 3.7% on surging rice costs

Article source:  https://mainichi.jp/english/articles/20250620/p2g/00m/0bu/009000c

Ideas

Japan is a resource poor country, which means they have to import much of what the need including gas, oil, and anything needed to make things including some food products.

And then if you add in the weak Japanese yen, that makes imports prices even higher which means Japanese households have to pay even more.

Rice is separate problem as there seems to be something amiss  with rice supply chain in Japan maybe some of the suppliers might be acting like they are a cartel and trying to control the rice prices.

Most central banks would like to keep inflation around the 2 percent level and they feel its a manageable level and its a good gauge of how an economy is operating.

Too high and an economy might be overheating and too low an economy is not operating efficiently.

The Japanese government, years ago, should have put some price controls on key factors that affect everyday Japanese households and a way to relieve the stress on Japanese families.

Something is amiss again with the Japanese economy has maybe other economies have begun to see inflation decreasing but not in Japan for some reason.

There is the possibility that maybe there are problems with some Japan supply chains that are either acting like cartels or the fact that the Japanese supply chains are too multilayered which means each time a product moves from one middleman to another middleman the price goes up on the product and when it goes to the final customer the price has increased a lot.

There might not be a rice shortage if the Japanese government released all of its reserve rice and actually shipped it to supermarkets and not though the normal supply chains channels with increases the price too much.

But then there is the problem of the media supposedly saying the reserve rice doesn't taste as good as the name-brand rice that many Japanese consumers like.

it's possible that the medial suggesting that the reserve rice is/was not as good as the name-brand rice might be the result of traditional rice producers aiding the media to make such comments as a way to get Japanese consumers to keep buying the traditional rice despite the price being very high.

There is also the problem of maybe shipping costs. globally have increased a lot since the pandemic as shipping companies too lost a lot of revenue and also the fact that oil and gas prices have increased a lot for shipping companies.

Then there is the idea that agricultural products are subject to good growing seasons and not so good growing seasons,which might be the reason for the decreases in cabbage prices and also part of the problem for the high rice prices.

Good growing seasons might result in lower prices and not so good growing seasons might result in higher prices.

Rice is supposed to be a main staple in the Japanese diet so what has happened where the main food staple in Japan has seen prices increase so much, as maybe someone or some group is/are acting in their own self interests and not in the interest of Japanese society.

Why has it taken almost a year for the Japanese government to figure out how to solve this problem as the problem originated about a year ago.

Again, if rice in Japan is such an important food staple why has the Japanese government allowed the situation to last as long as it has.

There is the idea of maybe price controls to help Japanese families could have been used a long time ago as a way to lower the price of rice and any other important food staple such as eggs, bread, noodles and some meat not to mention needed fruits and vegetables.

Most likely the high energy prices that climbed 8.1 percent might have been too much for Japanese families and they had to cut back on something such as not buying durable goods such as air conditioners.

All of these prices increases on many products means that some or many Japanese households have less disposable income to use in the Japanese economy which then means less consumer spending to help increase the Japanese economy grow.

The service sector which usually doesn't mean the selling of tangible products but intangible products or services, so they usually don't pass-on their costs to the customer but they do pass on their wage increases to the final customers as service sector companies usually have very thin profit margins and need to maintain those profit margins to stay in business.

Have a nice day!

Japan Core Consumer Prices: Updated April, 19, 2025.

Japan's core consumer prices up 3.2% in March on high rice prices

Article source:  https://mainichi.jp/english/articles/20250418/p2g/00m/0bu/008000c

Ideas;
Core consumer prices in Japan has been increasing ever since the pandemic started and while it might be slowing gradually there is no end in sight for Japanese households or the Japanese economy.

The Bank of Japan's target of 2 percent is a reasonable goal, like other central banks, but not much as changed even though the BOJ has implement two rate increases to try and decrease inflation with no really affect.

Perhaps the BOJ needs to increase the rate even more, but at the same time, there might be too many side effects that could hurt the Japanese economy.

From 3.0 to 3.2 percent might not seem that much of an increase but it could be enough to cause stress on some Japanese households including those with young children, or single parent households or even those on fixed incomes in Japan.

And it might be remember, that this might be increase of one month, but what about all of the other months where there were price increases and it starts to add up each month over time.

It can't be said that inflation in the US has decreased that much as many US households too are still feeling the affects of inflation.

An increase of 2.7 and 2.8 percent doesn't seem like that much but tell that to the Japanese single parent, or the part-time worker, or the fixed income couple in Japan.

At the same time, as inflation continues to increase in Japan, income inequality keeps increasing in Japan, which is the difference between the highest income and the lowest income and its been increasing every year since the asset bust of 1989. 

What is happening as income inequality continues to increase in Japan, it decreases Japanese consumer's disposable income which means less and less Japanese households are able to spend freely in the Japanese economy which is reducing economic growth in Japan.

Some might say the Bank of Japan needs to do more or some might say the Japanese government needs to do more to reduce inflation but governments can only do so much as maybe the normal tools used to manage the economy are not working there might not be much that can be done and the idea then is too just let inflation run its course naturally and hopefully it decreases over time.

That might be one strategy with the idea of do no harm, meaning don't make the situation worse, as maybe other more stern measures might cause more harm than good in the Japanese economy.

The Bank of Japan and the Japanese government are in a tricky situation now with more like a  catch-22 situation meaning whatever we do are going to have significant side affects and there is no real significant way to reduce inflation without harming the economy or Japanese households.

Its unfortunate that there is a so-called rice shortage in Japan or was rice shortage, as the Japanese government has attempted to release its reserve rice stockpiles to increase supply but with no real significant difference in prices and maybe the middlemen are keeping the prices artificially high at this time to maximize prices as much as possible.

Real wages is a different but still related story as inflation keeps real wages from increasing which means Japanese households have less and less purchasing power and or less and less disposable income to use in the Japanese economy.

And all of this means is Japanese consumer spending might be 50 percent of Japan's GDP, but as Japanese consumers real wages keep decreasing there is going to be less and less spending in the Japanese economy, and again, less economic growth.

It's quite possible some in the Japanese rice market might have more than normal market power, meaning they are influencing prices in a way that is upsetting the normal supply and demand mechanisms.

While in a market economy, everyone has the right to buy and sell as they see fit, but at the same time, there is the idea that no actor in market can just set a price that might be against the best intentions of society and that might be happening now. There is also the idea of whatever the market can bear, meaning the highest price we charge and not lose customers. But in this case consumers continue to buy rice, at a very high price,  as its a very important stable for Japanese households.

It seems Japanese suppliers maybe are using the hot weather or higher production costs as a way to keep prices high as why have rice prices this year increased significantly when production costs might have been increasing for many years.

In this case, it might be a good time for the Japanese government to introduce temporary price controls on rice, meaning put a maximum price on rice and then give subsidies to the Japanese farmers or middlemen to ease the stress on Japanese households.

Again, while not trying to influence supply and demand normal mechanisms too much price controls on Japanese food stables might be needed for the short-term until prices can bet back to some kind of normal. to reduce the stress on Japanese households especially those with children, those who are single parent households and fixed income households.

There is no real guarantee that rate increases can reduce inflation and there is no really guarantee how long it will take and there is also the problem with the side affects of rate increases which could significantly affect some Japanese households.

The Japanese economy is still in a stagnant situation, meaning it really hasn't grown that much or even at all for a significant number of years.

And then there is the idea of wage increases in Japan, but wage increases need to be felt by all Japanese workers and not just those in large Japanese companies. For example, its estimated that 70 percent of the Japanese workforce don't work for the large name-brand Japanese companies but small and midsize companies which tend to pay much less in wage increases.

Yes, the T administration has caused chaos all over the global arena and there seems to be no letup to the confusion.

There are no winners in a trade war and if the there is China/US trade war its going to affect all countries globally and there no one country that is safe.

It might not be the right time for the Bank of Japan to make any changes as the Japanese economy is maybe just waiting to see what is really going to happen.

Unfortunately T is not following normal procedures as T really doesn't have the power or authority to decide tariffs. as the US congress, is supposed to have the authority on tariffs and trade deals, but T is not a normal president following the rule of law or respecting the checks and balances of normal president.

Have a nice day!

Japan CPI : Updated March 29, 2024.

 

Japan core CPI logs fastest rise in 41 yrs in 2023, points to easing

Article Source: https://mainichi.jp/english/articles/20240119/p2g/00m/0bu/006000c

Ideas:

Japan is resource poor country, which means it has to import much of what it needs and if the yen is weak, import prices are higher than normal, putting a lot of stress on Japanese households.

Prices increases seem to be a global challenge as many countries/economies are experiencing an increase in inflation these days. 

Household utility bills are only a small part of the costs that households have to overcome. But as households costs continue to increase, there is the potential that there is not much extra income left for spending in the Japanese economy.

Food prices might be one of the biggest expenses that many families have to live with and lower-income families usually spend more per capita on food than higher-income households.

The Bank of Japan, like many central banks, want to see inflation in the 2 to 4 percent range, as many central banks feel its a manageable level. But it seems the Bank of Japan wants a 2 percent level, as maybe there are many senior citizens in Japan and they live on fixed incomes and inflation higher than 2 percent might be too much for them.

At the same time, it seems to the Bank of Japan is relying heavily on wage increases as a way to get out of the inflation trap the Japanese economy is in now. But the challenge with that is when companies increase wages, then they have to pay for the wage increases by increasing prices on their products.

The other challenge is that all companies in Japan need to increase wages, as up to 70 percent of Japanese wage earners don't work for large companies, and in April of 2023, it was mostly large companies that increased wages, and not many small and midsize companies increased wages.

For many years, Japanese companies were very reluctant to increase prices for fear of losing customers and or because many companies were not so many companies didn't increase their prices, even though they might have had profit margin challenges.

Even if inflation has decreased to 2.3 from 2.5 that is not a significant decrease for the average household or consumer to see or feel much of a change yet.

There is a lot of noise about what the Bank of Japan is going to do, but even if they do decide to change their ultra-low policy, most likely its not going to be too dramatic or significant at the beginning, as they will try to feel out what is best and see what happens with some strategic moves and see what the effects are on the Japanese economy.

Inflation is related to two kinds of variables. One variable is cost-push inflation or the increase in prices by companies because they need to pass on their costs to the next in the supply chain, and it has nothing to do with consumer demand.

Consumer demand is the other kind of inflation and as companies see sales increase significantly companies will increase prices due to increased demand for their products.

The Japanese economy has experienced cost-push inflation for a few years, but not much related to consumer demand, as consumer demand and consumer spending is always not what it should be or could be.

If many companies, in April of 2024, do increase wages significantly, they might need to increase prices on their products as a way to keep their profit margins in the safe-zone, and the key is what are Japanese consumer going to do with the increased price increases.

Back in 2014 and again in 2019 the Japanese government increased the sales tax from 5 to 8 8 percent and then from 8 to 10 percent. Each time, Japanese consumers went on buying sprees before the tax increases were implemented and then after the prices increases consumer demand significantly decreased until consumers got use to the higher sales tax increases.

Accommodation fee/price increases might be combination of increased tourism, both domestic and international and hotels are maybe trying to makeup for all of their losses during the pandemic period.

Also, because of a possible shortage of labor in the hotel industry, hotels have to pay higher wages to attract workers back to the hotels that might have been laid off or quit during the pandemic.

Fresh food is always a major variable related to inflation as growing seasons and import cost might increase the prices of fresh food, and maybe many households are thinking twice about what to buy and or what substitutes to buy because of high food costs.

There was no change in the January meeting of the Bank of Japan, but later, like in March of 2024 there were some moves by the Bank of Japan.

Even if inflation does get below 2 percent, its been high for so long, that Japanese consumers might not notice and it takes some time, to feel the effects of inflation changes, up and down.

Again, the seems to be a lot of noise about what the Bank of Japan is going to do in the future and are they going to make any significant moves that might have an affect on the Japanese economy. Most likely, again, if the they make a move its not going to be that significant in the beginning.

Again, the Japanese economy is a resource poor country, and has to import much of what it needs from energy to food. And as such the weak Japanese yen, has made import prices higher as imports now cost more.

The Bank of Japan, seems to be relying on wage increases as a way to slowdown inflation form the weak yen, But the challenge is will all Japanese companies comply and increase wages or will it only be large companies again like in 2023.

Some 70 percent of Japanese wage earners don't work for large Japanese companies, but work for small and midsize companies. If small and midsize companies don't come through that means up to 70 percent of Japanese wage earners will go on living with higher inflation while large company wage earners might see some relief with increased wages in April of 2024.

Have a nice day and be safe!

Japan Consumer Prices: Updated Feb. 2. 2024

 

Japan's Oct. CPI up 2.9%, service prices see quickest gain in 30 yrs

Article Source: https://mainichi.jp/english/articles/20231124/p2g/00m/0bu/012000c

Article:

TOKYO (Kyodo) -- Japan's core consumer inflation accelerated to 2.9 percent in October from a year earlier, with services prices marking the fastest gain in three decades, government data showed Friday, keeping up pressure on the Bank of Japan as the key gauge has remained above its target for well over a year.

The pace of increase in the nationwide core consumer price index excluding volatile fresh food items rose from 2.8 percent in September, as the government scrambles to ease the pain of higher prices on households with new inflation relief measures.

The closely watched gauge of inflation was above the BOJ's 2 percent target for the 19th straight month, due to the lingering effects of higher fuel and raw material costs, boosted by a weaker yen.

Ideas:
Most likely the increase in prices for services has more to do with service companies trying to make up for their losses during the pandemic as service type companies were the hardest during the pandemic.

As inflation continues in Japan, the Bank of Japan will be under more pressure to actually not change its current policy, as the thinking is the Japanese economy is still too weak to handle interest rate increases.

Most central banks prefer to keep inflation between 2 and 4 percent, but it seems the Bank of Japan prefers inflation to be around 2 percent, as maybe any higher many of the low-income groups including fixed income groups are under too much stress if inflation gets any higher.

Article:

Stripping away both energy and fresh food prices, so-called core-core CPI increased 4.0 percent, in a sign of persisting inflationary pressures.

BOJ board members have begun to express growing confidence about attaining the inflation target in a "stable and sustainable" way as expectations rise for the momentum behind pay hikes to continue into next year.

"What we have seen so far is that consumption was rather solid in the face of cost-push inflation because of COVID-related catch-up demand. But there is uncertainty over whether that strength will continue," said Shinichiro Kobayashi, a senior economist at Mitsubishi UFJ Research and Consulting.

Ideas:

Maybe, for the most part, Japanese consumers are finding ways to continue to spend on what they want and need despite the continued inflation. That might be a good sign that maybe Japanese consumers have begun to accept inflation in Japan, and not think of Japan as a deflation economy.

As yes, will Japanese consumers continue to spend in the Japanese economy as needed or will they shrink back and save and or only buy what they need?

Wage increases in April of 2024, will be a test for the Bank of Japan, as if companies, all companies, not just large companies can exceed what the BOJ thinks is needed then maybe the BOJ will begin to change its ultralow policy.

But the changes might not be that significant at the BOJ doesn't want to cause too much stress with too many changes too soon.

Article:

Higher prices for everyday goods have hurt consumer sentiment as wage growth has failed to keep pace with inflation. Japan's economic growth stalled in the July-September quarter due to weak spending by both consumers and companies.

Energy prices dropped 8.7 percent, weighed down by government subsidies for lowering gasoline and other fuel costs to support households. The fall was smaller than the previous month's 11.7 percent.

Kerosene prices rose 4.8 percent and gasoline increased 5.0 percent.

Ideas:

Here we go again, in one part of the article it says "consumption was rather solid." but now it says consumer sentiment is not so good, which usually translates into less consumer spending.

But no doubt higher prices and inflation have caused a lot of stress among Japanese consumers. For example maybe the lower-income groups and the fixed income groups might be having the most stress, as they spend more of the income on food than the higher income groups.

Every economy goes through the business cycle, meaning there are always going to be periods of less growth and periods of more growth. 

The Japanese government, for the time being, is to keep energy subsidies in place as a way to reduce the stress on Japanese households. 

Article:

The government has decided to extend fuel subsidies until next spring as part of its economy-supporting package, which also includes temporary tax cuts and payouts to low-income households, along with tax incentives for companies to raise wages.

In a blow to households, food prices, other than those of perishables, rose 7.6 percent and durable goods gained 3.2 percent.

Services prices increased 2.1 percent, marking the fastest gain since 1993, reflecting the resilience of domestic demand in the aftermath of the COVID-19 shock.

A major booster was a 42.6 percent jump in accommodation fees as travel demand continues to recover with the return of foreign tourists to Japan.

Ideas:

Food prices might also be related to import costs, as Japan has to import much of what it needs, and as the Japanese yen is weak, it causes import prices to be higher.

Service prices might be related to service type companies, as the they see demand improving, are trying to make up for their losses during the pandemic period, where service type companies were hit hard.

And yes, the record number of foreign tourists coming to Japan is no doubt helping Japanese hotels recover their losses from the pandemic. 

But at the same time, in other article, there might be a shortage of hotel workers as many sectors in Japan are experiencing labor shortages.

Japanese hotel, being a service type business, might not pay the best wages, as maybe many young Japanese workers don't want to work at hotels in Japan.

Article:

It also came in response to a sharp drop a year earlier under the government's discount program to spur tourism after the sector was hit by the COVID-19 pandemic.

Economists say the recent rising trend of services prices is an indication that a growing number of firms are passing on costs to secure workers amid acute labor shortages in the services sector.

Ideas:

Yes, for hotels and other service companies, to get the best workers possible, they have to pay better wages, and of course they are probably pass-on these increased wage costs to the consumers. 

But this is not new as maybe many Japanese companies are trying the same thing as they increase wages, they pass-on their costs to the next in the supply chain including the final customer.

There are many sectors in Japan with labor shortages, and in order to attract the needed workers many companies are increasing wages to attract a younger group or workers as maybe many young workers won't work for a company that doesn't give the wages they want or need and also the work/life balance they want or need.

Article:

Kobayashi expects inflation to slow but only at a moderate pace, saying Japan is "at a crossroads" regarding whether a virtuous cycle of price and wage hikes will be firmly set in motion.

"We need to see whether companies will use their profits to raise pay and ramp up investment more. The ball is in their court," he added.

Ideas:

Japanese companies used to think of employees as stakeholders or an important part of the company. But in recent years, decades, maybe they have moved to a western style of thinking of stockholders as the most important part of the company, as as result, they have not given their employees wage increases for a very long time.

It seems to Bank of Japan is relying too much on companies to increase wages as a way to control inflation and lowering the inflation stress of Japanese households.

But the problem is, 70 percent or Japanese workers don't work for large companies, which gave most of the wage increases in 2023, and not many small or midsize companies gave wage increases.

So, in April of 2024 if small and midsize companies, again, don't increase wages, the Japanese economy will be stuck in a two tier wage system of haves and have-nots, which will not good and will increase inequality in the Japanese economy.

Have a nice day and be safe!