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© Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.Inflation a worry for most economies, but not Japan
By ELAINE KURTENBACH TOKYO©2024 GPlusMedia Inc.
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JeffLee
The cycle can only be broken by the private sector through wage rises. But they refuse, adhering to wage-suppression business models despite raking in record-high profits. Remember, kids, money is only for the super rich.
Asiaman7
Support info from the Economist:
Land of the falling price
The case of Japan’s curiously quiescent inflation rate
As consumer prices rise across much of the world, inflation in Japan stays stubbornly low.
https://www.economist.com/finance-and-economics/2021/11/20/the-case-of-the-curiously-quiescent-inflation-rate
sakurasuki
Because Japan need to worry on something else, when other countries economy will rebound after pandemic. Will that happen to Japan too? Will be growth in Japan?
https://www.intereconomics.eu/contents/year/2019/number/5/article/japanese-economy-two-lost-decades-and-how-many-more.html
If there is growth, is that because fake data?
https://www.reuters.com/world/asia-pacific/japan-ministry-overstated-construction-orders-data-years-asahi-2021-12-15/
Hiro
While the world is arming themselves to fight inflation and stop it, Japan is still desperately trying to chase after that 2% inflation for a very long time now. Banks cursing why it won't rise.
Chabbawanga
Its so funny that Nations actually persue inflation. Even after 30 years of trying Japan are still aiming for that mythical 2% annual increase. Maybe, just maybe, its time to try something else. Maybe let a few of those dinosaur companies die off to make room for more productive and efficient technology companies. Maybe Japan could be the first nation to embrace a technology-supported, shrinking economy. It makes perfect sense with the declining population.
WeiWei
It’s excellent news that the idiot “2%” target is not reached. Rising prices are never a good thing, not for the Taro anyway. Inflation also does not bring real growth, just because the numbers are bigger does not mean there was any producivity increase.
kurisupisu
The cost of food in Japan is not comparable to other first world countries.
Weights and measures are not put on packs and fruit and vegetables are sold in packs of six or five; not individually.
And why is there tax on food?
Try folding a pack of something and half of it is…air!
Yrral
Inflation is better than a depression anyday
Peter Neil
Yeah, well, try folding a pack of air in places with little or no fruits or vegetables.
kibousha
Why the need for inflation ? Most people will regurgitate the typical neo-liberals' argument, "since prices are stagnant/falling, people will wait for next year to buy food, staying hungry to save money, bla, bla, bla", If you're honest, you'll see what they really want is for you to keep mindlessly consuming stuffs to make their bottom line sky high and allow CEOs to buy another yatch while the world is burning left and right.
Companies not rising prices when material prices are rising everywhere is another way to "return profit" back to society, no need for complicated "new capitalism" or whatever jargon.
miss_oikawa
I thought Japan was supposed to worry about not having inflation? Which one is it? Make your mind up "expert" economists.
Perhaps think about the end for once (productivity and the benefits for people) instead of the means (an intangible, man-made currency system).
Yubaru
Not a problem? Geez, I bet the writer of this article doesnt own a vehicle or do any driving!
Gasoline prices have jumped, what over 30 to 40 yen per liter over the past few months, and you say it isnt a problem?
Take your blinders off and talk to the PEOPLE who have to pay for everything! Us the consumer! There have been noticeable increases in food costs as well, as the increase in fuel costs have forced many manufacturers to increase prices to cover the costs, and even if the fuel costs drop, they wont drop their prices!
This is a propaganda ministry advertisement!
Chabbawanga
Shrinkflation is real. At least here they arent increasing the prices AND decreasing the amount of product you get.
Disillusioned
Over the last twenty years or so Japan has seen an increase in comodity prices and a decrease in average salaries. This is deflation. It's a trend that is set to continue as salaries remain stagnent and comodity prices continue to rise. The middle class is slowly but surely disappearing in Japan with a ridiculously low minimum wage (¥950 p/h) and 60% of the workforce on short-term, semi-permanent or part time working contracts. Inflation is the least of Japan's worries. They should be more concerned about the 20% of kids living in poverty in the 'rich country'.
snowymountainhell
The perception of devastation from ‘ground zero’ is always more realistic. Those from those on high have no real sense of the toll on the citizens.
Chabbawanga
Is it time to introduce a universal basic income? As automation takes over, it isn't like there are going to be more jobs emerging.
snowymountainhell
Nail on the head @kurisupisu 7:20am: (Btw: “Welcome Back!” to Japan; )
“And why is there tax on food?” -snowymountainhell
‘Smoke & mirrors’: While packaged food prices appear to be held steady and consistent at most supermarkets at price per gram, the size of the inner package has shrunk.
snowymountainhell
As others have pointed out on related posts, corporations, retailers & food conglomerates are grossly taking advantage of inflation, the pandemic, remote work, continued low wages and the over abundance of college graduates chained to student loans & debt. Japan just lowered the legal age for young adults to enter contracts opening the door for each to open more lines of credit & crippling debt.
vendingmachinemusic
I am saving more. Thats for sure.
Stay home, Kyabakura is closed.
I always search out the cheapest deal online, but I am loyal pawn to Jvogue, and my porsche dealer.
Kumagaijin
Japanese businesses can be so hesitant to raise prices. I remember a few years ago, the price of a 19 yen bag of moyashi went up to 20 yen. It was all over the news.
So I think businesses and even food producers feel they have to match wage increases with product increase. So, why bother?
Iron Lad
Good news!
This is due to the price control in Japan.
kurisupisu
@snowymountainhell
Thank you!
Presently, enjoying a lot of (free) combini food from the Japanese government in isolation
Flute
I do not get the obsession of the government for inflation out of nothing.
People have no money to spend on inflation. Sometimes, you can see references about Japanese large savings but these people same to forgot this money is already channeled (buying a house, renovating it, children study, grandchildren support, retirement, and so on). Inflation just mean more money will need to be saved for the one who can afford it and more stress for the one which can not. There was consecutive years of inflation thought low. Taxes increased too. Salary did not increase. People have to compensate inflation in their way of life so less short term spending.
Does the government not know that ?
Desert Tortoise
Nope. If prices are rising you have inflation. Deflation is when prices, business revenues, profits and wages fall in unison. When you have falling real wages in an economy with rising prices the immediate suspect is the presence of oligopolies or even monopolies exerting market power in major consumer markets. That is in fact the case in the US especially. I have not studied the Japanese consumer market to know if the same is true there.
Btw, the big danger of allowing a deflation to develop is that the only thing that doesn't fall are outstanding loan balances. When business revenues and personal incomes fall to the point they are no longer able to service their debt payments then you have mass bankruptcy, mass unemployment, mass foreclosures and evictions, and misery rivaled only by war. That is why economists fixate on trying to achieve a low steady rate of inflation, close to 2% per year. That provides stability for businesses and families to plan without eroding savings or wage gains excessively while giving central banks some padding to deal with deflationary pressures, which has been the case since 2009 until this year.
Septim Dynasty
After hearing the GDP faking scandal recently, many people start doubting the economic data from Japan. Especially with inflation/deflation data, they start to have a healthy skepticism. The article claims that Japan does not suffer from inflation, while there is also a pro-Japan mouthpiece that said stealthy inflation (shrinkflation) is decimating Japan.
https://www.japantimes.co.jp/news/2021/12/04/business/economy-business/japan-shrinkflation-economy/
Those bureaucrats in Nagato-cho are probably cooking the figures to hide the statistics on inflationary pressures, while shrinkflation continues existing in reality.
shogun36
Then Japan doesn’t understand what’s going on.
browny1
Why always the "excluding volatile grocery & energy prices" card is thrown up.
As others above have indicated, these daily goods are the necessary component of survival for tens of millions of citizens.
To treat them as anything less -- ie not so important - is disingenuous in the least.
The price of food, utilities, gasoline has certainly greatly increased over the past 30 years of "deflation".
Just a cop-out lie to say otherwise.
And raise wages substantially to at least a minimum of ¥1500 / hr.
Then ordinary folks can release pressure on the just-surviving capsule and start to spend more widely, helping to realize that bs magical moment of 2% inflation.
CaptDingleheimer
The can of beer that was ¥158 when I lived in Japan in 2004? ¥158 today.
The lift ticket at the ski area that was ¥3800? Oh, darn- now it's skyrocketed to ¥4100.
The ¥400 dip in a great rustic Tohoku onsen? ¥400 today. And if I want to stay overnight with 2 great meals? It's the same ¥12000 it cost me back in the day. You get the picture.
While the lack of inflation perhaps hasn't been friendly to the Japanese economy, it sure makes it nice when I visit with my family, exchanging 2021 US dollars.
(OK, 2019 dollars. We haven't been back in 2 years)
Iron Lad
@CaptDingleheimer
The power of price control.
Hope Japan stays like this.
Sven Asai
The problem for most people is, that those theoretical inflation values are calculated and published based on a phantasy mix of ‘standard’ goods and services. In reality, the biggest part of the population will feel and have an inflation that is much higher than those ‘target 2%’, because they just only can spend everything they still have in principle for goods from the supermarkets and gasoline or other energy costs for getting to workplace and make home comfortable. All those are exploding, as you can see from your receipts. Everything else in the mixed calculation for inflation doesn’t play any significant role for the average or better median like person. Or do you belong to the small minority, that always buys the newest TV and car every six months and has weekly repaired or cleaned a mansion pool , flying to Paris for Christmas shopping and visit beauty doctors every week and all such? In that case congratulations, your inflation over all that summed up is probably as low as stated for here or even lower, maybe negative. lol
CrashTestDummy
The inflation in the US is solely due to Biden policies. As soon as he got into office, prices started to skyrocket even though it was one year into the pandemic. Not a coincidence.
CrashTestDummy
People always told me how expensive Japan was until I finally got around to traveling to Japan. The reality is that the prices for most daily consumables (food, drink, and everyday products) is much less than the US.
kitts
I hear they printed so much money that there's a toilet paper shortage? Not good. not good.
kitts
What I see when I go to the supermarket is that everything is getting smaller, lighter, thinner, shorter, worse-tasting, cheaper-looking and so on. Sometimes they try to keep the packaging the same size as before so people "don't notice", lol. Of course there is inflation.
Alan Bogglesworth
This paper is just relentless in its positivity from Japan. No matter how dire the situation, Japan is on top of it. Bravo ?
Iron Lad
@Alan Bogglesworth
Actually, this site is usually anti-Japan, but when the good news hit, you can't stop it.
BackpackingNepal
Japans' next economy is Sponge Economy.
Seth M
The inflation is mainly due to the weakening share of US dollar in international trades. For example Russia now exclusively trade with China with their own currencies.
Mark E
So many arm-chair economists in here its unbelievable.
So long as the BOJ and govt force the Yen to stay low (over 100yen/$1 USD there will be no inflation. If inflation hits and the Yen isn't allowed to increase in value we are going to see a sharp snap down and things will go the way of Turkey/Argentina/Zimbabwe. It would be great if the BOJ would let the Yen mature in value but people should be grateful we aren't seeing the Yen drop to pre-bubble 300yen/$1 rates.
kurisupisu
@zichi
I have never seen a single potato nor a carrot for sale here , a large pepper sometimes but single items are rare.
And have you never seen a Miyazaki mango?
Those are thousands of yen for the top notch examples.
Yubaru
Please, share! Name the actual beer you are drinking today at 158 yen, that was the same price back in 2004!
You arent drinking 158 yen "beer" today! It's either happosu or some dai san crap that aint beer! Or maybe some imported mass swill, but it sure the hell isnt Kirin, Sapporo, Asahi, or Orion BEER!
Yubaru
Uhmm... better add a zero to the "thousands". A top notch Miyazaki mango goes for 20,000 yen and maybe a bit more, depending upon the size!
Mango are a perfect example of "Japanese" branding! I bought two imported mangos last week. Imported from Peru, for 298 yen each! They were just as tasty as a 10,000 mango!
fxgai
Wow. It was neoliberals who conquered inflation back in the ‘80’s, yet you are blaming them for inflation and those arguments?
Numan
Japan hides its inflation like the country hides its pandemic infection numbers. They use shrinkflation to maintain prices. JT has already posted an article a week and half ago.
FizzBit
Of course not. The kind Japanese people won’t complain when products go from high to medium to low quality, or go from 250 grams to 230 to 200.
Went to a big Corp cake shop today get one as a present and every time in the last 3 years it’s changed. Last time it got smaller. This time they disappeared the nice raspberries and dab of whipped cream for every slice.
Yubaru
I wonder where in the heck you shop!
I can not recall any supermarket NOT having fruits and veggies sold individually as well as in packs.
EVER. Even the high end one's have them as well.
I wonder where you shop...
Iron Lad
Lot of signals here, I wonder which one is true.
smithinjapan
kurisupisu: "I have never seen a single potato nor a carrot for sale here , a large pepper sometimes but single items are rare."
Dude... they even sell single bananas and single stalks of celery. Not every shop is a CostCo or a Gyomu su-pa. In fact, only those shops are those shops; everywhere else sells single vegetables and fruits of one type or another -- heck, they even package the individual vegetables.
snowymountainhell
Certainly many here @Yubaru 9:26pm are also ‘wondering’ if you are serious about ‘wondering where’ someone ‘shops’. (You’ve only stated it TWICE.) - Stop ‘wondering’ and just ask outright.
kurisupisu
I am most definitely not saying that single items cannot be bought but that the stores doing so are ( in my experience) not so common.
There are certainly single bananas in convenience stores but in supermarkets I have never seen them.
In the really small stores everything is placed on a plastic tray-not wrapped and without any weight value.
Of course, larger items like water melons are single items.
You buy what you see.
The high end stores will box items up for sale at inflated prices and those items might be marked as to weight or unmarked.
These items are for gift giving usually.
And then such companies as Japan Post do the same with multiple items for the same end.
Just to compare with the big chain supermarkets in the UK where it is possible to choose and weigh and price an item by yourself;I cannot recall doing that here in Japan.
albaleo
How far pre-bubble are we going? In 1986, it was around ¥160 to a dollar. In 1980, around ¥210. It was around ¥300 in 1975.
GBR48
Japan will struggle to see 2% inflation? That depends on who you are and which figures you are averaging. Many Japanese, for whom a large percentage of their spending is essential, food-based and non-discretionary, are going to see huge rises in their weekly expenditure. Food costs may double or more. Incomes will not rise and some will vanish.
Food production is going to be hammered by supply chain crimping, border blocks, sanctions and climate change. The globalised economy has fed all of those who could afford to pay, but it is being dismantled. Food prices are going to rocket and availability will be decimated.
The poverty gap is going to widen between a wealthy elite and the rest of us, with the lower middle classes being a lost job away from real hardship. And there will be a lot of lost jobs as sectors are decimated. Travel, tourism, hospitality and even IT. Tech has been a primary economic driver for 30 years but the whole private sector/VC ethos may soon be replaced by state control on the grounds of public safety and national security. That alone will flip the global growth spiral from 'up' to 'down'. A broken supply chain - and there will be many in an Asia that has to choose between the US and China - can close any company, even if consumers want their products. At the bottom of the economic pyramid, it will become even more of a dogfight to survive.
Japan may continue to announce a low official inflation figure, but this will be completely alien to the day to day reality for anyone who isn't at least financially comfortable. And that will be a lot more people in the future.
Peter14
The trigger for inflation is wage increases for the minimum wage earners. That signals everyone to increase charges for goods and services so that the poor are not actually better of from the pay increases.
Give the poor an extra 10,000 yen and rent goes up 8,000 yen, food goes up 3,000 yen, power and gas go up 1,000 yen each, fuel goes up 200 yen/liter etc etc so the pay rise disapears and the poor end up poorer.
Desert Tortoise
That is simply not true. What you are saying is as wrong as the lies about election fraud or Covid-19 vaccines. The basket of goods used to calculate the consumer price index is updated routinely to reflect changing tastes and preferences for goods and services. Food and fuel have a cyclical component that is outside of the underlying inflationary or deflationary trends of an economy. Most governments publish inflation with and without food and fuel so the gentle reader can see for themselves what is going on. There are no big secrets, no intent to deceive. Demand for fuel changes cyclicly over the year and as a result so does price. Food is most abundant in July - October and thus prices are lowest during those months. Food prices rise right at the end of the year into the early part of the next year due to reduced availability. In much of the country there is snow on the ground making it hard to grow things. That is all well understood and documented. Instead of rumors spend time to learn how inflation is calculated and reported. No secrets, no deception, no grand conspiracy.
Desert Tortoise
Um, no. Scarcity of goods, a sudden increase in demand, disruptions in transportation, things like sailors on merchant ships being stuck on ships for over a year unable to get off anywhere and often unpaid, new crews unable to replace the over worked crews all due to Covid-19 restrictions on travel, major sea ports shutting down over Covid-19 cases in the port workforce, ships backing up in ports due to record numbers of ships calling, prices to ship containers across the sea five to ten times pre-pandemic prices combined with a scarcity of containers due to increased demand, all contribute to the current rapid rise in prices. In this case increasing wages is trailing the increases in transportation costs and shortages of goods due to a rapid increase in demand for goods. Due to Covid-19 families have substituted spending on dining out and other entertainment for spending on goods. That sudden change in spending habits was not anticipated by any industry and they were all caught by surprise. Considering the last global pandemic was over a century ago it should not surprise anyone that nobody expected that change. Nothing sinister about this. The world wasn't prepared for this but who even imagined all the ways things could go wrong? I think instead of complaining and looking for people to blame we all need to start taking it upon ourselves to do everything we can to help the situation. If you expect someone else to fix it and you go on with your life I think you are in for a rude surprise. We are all in this together and we all have to make a few sacrifices to end this pandemic.
Nadrew
How can the government exclude this data? Orwellian! Of course we are feeling the rising prices.
There is a NeoLiberal war against poor people. The BOJ devalues the Yen by printing money. Devaluing savings. Pumps money into the stock and bond markets. This raises the average net worth of all citizens, but benefits those with major holdings in these markets, I.e., rich people. All the while denying social services to the poorest. Yes, it is time for a basic income and an end to means testing for social services.
Desert Tortoise
As I mentioned above, the prices of food and fuel rise and fall seasonally every year regardless of what core inflation is doing. Food is always more expensive late fall into spring, every year, year after year. That is a function of the growing season. When crops hit the market in early summer food prices always fall and continue to drop into October or November. Then, since nothing is being harvested as the first snows fall, food prices rise again. It is the same every year. Fuel prices rise and fall with seasonal demand, highest in winter for heating and mid summer for air conditioning and summer travel. Economist strip these out to understand what the rest of the economy is doing because that is what is important to see. The Japanese data show that the underlying trends in Japan are still deflationary overall. In December one would expect food and fuel prices to rise but if you only focus on that you miss the more important underlying deflationary tendencies in Japan's economy.