Japan's inflation hits 7-year high


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It's not terrible inflation, it just new capitalism

-7 ( +3 / -10 )

It was the first time since March 2015 that the figure has breached the 2.0 percent set by the Bank of Japan as its long-term inflation target.

These continually rising prices are exactly what the J government wants — but perhaps not what we consumers desire.

21 ( +23 / -2 )

The BOJ is going to really come under pressure now. Including from the government. Pressure on all sides.

"...last month's leap was driven in large part by a plunge last April in mobile phone fees."

Tell me about it. I'm paying less than half of what I used to pay for 10 times the data and free under 5-minute calls! Thanks, J-gov.

2 ( +8 / -6 )

""Analysts have warned that the pace of nominal wage increases in Japan is unlikely to track rising prices, dampening spending appetites"".

True, people will just shift priorities and spend $ only on basic needs, The BOJ and others are not and can't dictate how people spend their money, and if wages are not increased to match the rise in cost of living, then the obvious will happen, No new car, No new cell phone, No new bike, No new home, nothing over 5,000JPY until the BOJ stops manipulating their lives.

9 ( +12 / -3 )

excluding fresh food..... excluding energy..... so if I exclude those from my life, my meagre pension will allow me to live very comfortably. well that's a relief!

13 ( +19 / -6 )

So Kishida's "new capitalism" was just megastagflation after all. Quelle surprise!

11 ( +18 / -7 )

A good way to get rid of the debt created by the money printers working overtime during and preceding Covid! Looks like it is all going to plan….

-2 ( +6 / -8 )

A key reason for the lack of inflationary pressures in Japan has been that there is very little wealth creation and the standard of living has consequently been falling for years. There is nothing to suggest that this trend will change.

In the US, wealth at the individual level is created mostly through real estate (increasing home values), stock market investments and entrepreneurship. None of these is a source of wealth creation in Japan.

Not only have real estate prices been falling in the country for years, but homes in Japan depreciate much like cars and become worthless after about thirty years.

Japanese stocks have had negative returns over the last forty years, with the stock market currently significantly below its 1989 level (vs. many fold increase in the US for the S&P 500 during this period).

There is very little entrepreneurship in Japan, with many people preferring to work in stable but lower paying jobs. So, unlike the US, this too is not a source of wealth creation.

This combined with the demographic decline, an aging population, lack of immigration, stagnant wages and the general decline in Japanese competitiveness means that inflation is not likely to pick up in Japan - ever.

The BOJ knows this fully well and understands that its stated 2 percent inflation target is not achievable on a sustained basis. It uses this simply as justification for Japan’s huge quantitative easing (much bigger in scale than the US as a percent of GDP), as an excuse to prop up the stock market by purchasing huge amounts of equities, and most importantly to weaken the yen in order to increase Japan’s global competitiveness.

-1 ( +14 / -15 )

The bank argues that the price rises are not likely to last and therefore do not mean its inflation target has been achieved.

Do they really think that makers are going to start to cut prices after all of this. That never happens. So these price increases are here to stay. And they will just continue as energy will remain high and raw materials will be expensive as long as the conflict in Ukraine continues and China is in lockdown!

9 ( +11 / -2 )

Not only have real estate prices been falling in the country for years, but homes in Japan depreciate much like cars and become worthless after about thirty years.

Utter nonsense, find me a house in a good location in central Tokyo that is worthless please, I will take it off your hands for the land.

Also real estate prices have been rising year on year, you are wrong on everything you said here.

-11 ( +4 / -15 )

It is simple guys.

Bank of Japan will print no matter what, even if inflation would reach to 20%

Reason: Higher inflation reduces the real value of debt.

-1 ( +11 / -12 )

The calculation they use in Japan omits so many big costs that it is meaningless.

7 ( +11 / -4 )

Unfortunately none of this is being fueled by growth. Just skyrocketing wholesale prices and a weakening yen.

None of this bodes well for consumers and all of us regular Taros who aren't Tokyo based giant corporations and politicians who've been clamoring for 2% inflation for the last ten years.

9 ( +11 / -2 )

in other words.

pay more for/goods/butget less/amount/

get paid same or less/highly likely/but still pay more taxes to cover gov tax wasting here and there and to help them to increase national debt to record high levels every single year.

in short-dont expect any good outcome out of this.

poor will get more poor,desperate will get more desperate and yes some few rich will get much more rich.

pure capitalism as its best

5 ( +9 / -4 )

Do they really think that makers are going to start to cut prices after all of this. That never happens

It happened after the burst of the bubble. Many makers transferred manufacturing from Japan to cheaper places like China, for example. Or their new lineups were priced lower than the old lineups due to improved technology.

Japan's cost of living went down for many years until fairly recently. A 10,000 yen bill purchased less in goods and services during the bubble period than it does now.

-1 ( +1 / -2 )

Regarding evolution of real estate price, I think it all depends of the location. I was pleasantly surprised recently to discover that the price of my mansion had increased by 62 % compared to the price I bought it in 2003.

1 ( +3 / -2 )

Japan's inflation hits 7-year high:

This is unavoidable as global commodity prices continue to soar unrelentingly & the yen keeps slumping unstoppably.

Anyway, uncontrollable inflation surge is a global phenomenon in past months.

Everything is so unbelievably expensive.

What will happen down the road..?

2 ( +4 / -2 )

They asked for inflation and now they got it. Time to raise interest rates.

4 ( +6 / -2 )

pure capitalism as its best

Great comment, until the last line.

pay more taxes to cover gov tax wasting here and there and to help them to increase national debt to record high levels every single year.

Thats’s big government socialism, not capitalism!

Capitalism is when you get to keep what you earn, and the way someone gets your money is because they provide you with something that makes you agree to part with your it; you get something you wanted, someone gets some more money, win-win.

Put the government in the middle with all the tax and spend, and there is not much happiness to go round.

0 ( +1 / -1 )

Japan imports most of its energy, fuel and food.

The BOJ can do nothing about those rising costs.

Inflation is not transitory and the BOJ cannot forecast it to be.

Although I can afford it I tend to avoid meat (expensive) and buy more fish, tofu and beans in Japan.

1 ( +2 / -1 )

What economists want have always been bad for the average people. What’s “good” for the economy have generally been horrible for the vast majority.

Wages growth will never beat inflation if inflation is above 1%.

1 ( +2 / -1 )

I wonder why the BOJ can’t do QE, and a reverse income tax for low income households. That seems better to get the money in circulation.

3 ( +3 / -0 )

Buy cheap Russian gas and oil, join the Belt and Road initiative, train university students how to develop semiconductors, charge rent for US bases...problem solved.

0 ( +2 / -2 )

7 years ago was when they introduce 8% sales tax.

2 ( +2 / -0 )

People are always stupid and impatient, that's why people need to enjoy inflation. Why do people need to trust Russia and China, two untrustworthy thief nations? Congratulations, all of you will enjoy the price. If the supply chain wasn't in China in the first place, it wouldn't be so bad for people to really think about energy. Everyone has to pay people who do business with garbage countries.

0 ( +1 / -1 )

I guess the BoJ can finally party having completed their grail quest and beaten the demon deflation, turning Japan into a utopia of happy, wealthy, carefree people. I wonder what sort of bonus they are going to get for this.

2 ( +3 / -1 )

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