Japan's core consumer prices in August up 3.1% on year

Japan's core consumer prices in August up 3.1% on year

New capitalism just working smoothly like JGovt expected.

Rising prices continue to deal a blow to consumers in Japan where an increase in wages has not kept up with the soaring costs of goods and services.

Thanks New Capitalism!

Haven't heard much talk of that recently, no mystery why that is.

New capitalism just working smoothly like JGovt expected.

3.1 percent isn't bad, especially as it's due mostly to external cost-push factors. The situation is worse in most of Japan's peers.

This is the issue:

The country's real wages fell for the 16th straight month....

Private-sector employers need to share more of their record-high profits. The govt needs to hit them with higher taxes or new taxes or penalties to achieve that.

The gauge remained above the BOJ's 2 percent target for the 17th consecutive month.

Poll time - vote this up if you ever thought that the BOJ would successfully be able to create inflation but stop it at 2% without badly overshooting, and vote down if you were skeptical.

How funny is Japanese central planning these days?

They had price stability (think, can of coke in the vending machine for 100 yen) - roughly 0% inflation, more or less.

Then because other countries were suffering from higher inflation they said they too want “price stability” of 2% inflation (e.g. price instability), so the yen would be weaker, so that nothing would need to change.

Now that have that, they say they don’t like it that the weaker yen, which resulted from their policy, means higher energy costs.

So they are subsidizing energy companies to keep prices lower!

But they wanted inflation! Now they are subsidizing to keep prices lower?!

Japan was completely passed by by the anti-subsidy, smaller government wave that swept the world in the 1980’s.

Maybe Japan will get with the program, one day…

Americans can commiserate.

If you have massive debt inflation will help. We are now bearing that debt as consumers. Expect marriage and birth rate to continue to decline as consumers are poorer. Japanese I spoke to now cannot visit the US or Europe and can only afford Korea or other close destinations.

Every time inflation exceeds wage increases is a tough time and Japan has the worst sort of inflation; imported from abroad due to a falling currency.

Rip the band aide off, see who around the world is swimming without trucks and raise interest rates.

There is no reason Japanese workers should see their wealth erode day after day to prop up other people's debts.

Food prices across the world are still rising, much of it because of price gouging. In the EU, oil and gas are now a lot cheaper, and have fallen by about 1/3rd. But even then the prices being charged is still down to gouging. The horrible thing about big companies price gouging is that the majority of governments take no action about it. As for inflation rates, In Japan the rates are relatively low, in countries like Egypt it is 36% and in Argentina it is.........wait for it, 94%.

Well Argentina and Egypt always have this problem because of debt in foreign currencies. Japan basically just owes itself money in my understanding.

@fxgai

Poll time - vote this up if you ever thought that the BOJ would successfully be able to create inflation but stop it at 2% without badly overshooting, and vote down if you were skeptical.

I suspect you have a bet that's not working out...because there's plenty of communication from the BoJ as to their intention, ie waiting for wages to rise.

https://www3.nhk.or.jp/nhkworld/en/news/videos/20230922165232504/

Have a looks at this, just the first 10 minutes will do, but especially at 6:10...

https://www.youtube.com/watch?v=S6AUeA-vvk8

Look at profit distribution, shareholders gets the bulk of it whilst employees gets peanuts. That's a massive structural problem.

As to whether the BoJ is effective, look at the first 5 minutes. Massive profits from flat sales, genius. Steady rising RoE...rising middle class, AND rising leverage for home owners.

What more do the average middle to upper class Japanese want? This is as good as it gets.

JeffLee and I have been repeating the same info over and over as to how middle class Japanese earns extraordinary income just through investments and leveraging the performance of Japanese corporations, Walls st have finally caught up, with recent news of Berkshire upping its stake here....it might not be as good as before, but still pretty good for those with spare money to invest, and Ueda is NOT going to upset the cart.

Rip the band aide off, see who around the world is swimming without trucks and raise interest rates.

I don’t think they will be raising interest rates much besides ending the negative interest rate, while they continue to print tens of billion or so yen each year.

The US FOMC is slowly winding down the size of its bloated balance sheet, but long term market rates in Japan would sky rocket if the BOJ were to try that… even the US 10 year is yielding 4.5% now, and Japan’s public debt is on a much worse state.

@Sh1mon

I suspect you have a bet that's not working out...

I wonder why. I have been riding the yen weakening trend since long before it fell through 100, and thanking my good fortune that I put my money in non-Japanese assets.

because there's plenty of communication from the BoJ as to their intention, ie waiting for wages to rise.

Well, I predict it here for you now - the BOJ will change their story.

Previously they said they would target 2% inflation. We have been running above 2% inflation for months now.

Naturally, to provide cover for continuing to print money, they changed the goalposts, and are now talking about wages as you note.

You may believe them. I do not, given what I have seen so far. At the end of the day, the government is running massive deficits, and having the BOJ finance it with money printing, is their selected strategy. The value of the yen is the collateral damage.

They are going to continue to print money irrespective of whatever wages might do.

Look at profit distribution, shareholders gets the bulk of it whilst employees gets peanuts. That's a massive structural problem.

Profits are after wages are paid. Profits belong to shareholders, that’s what being a shareholder is for.

Japan’s wages being stagnant comes down to other factors, in my estimation.

middle class Japanese earns extraordinary income just through investments and leveraging the performance of Japanese corporations,

Not sure how this is different from people investing in stock markets in other places…

And over the last 30 years the equity markets elsewhere have returned more than Japan’s.

Walls st have finally caught up, with recent news of Berkshire upping its stake here....

and taking out debt in yen to hedge it.

it might not be as good as before, but still pretty good for those with spare money to invest, and Ueda is NOT going to upset the cart.

Heres the thing. No one resident in Japan is limited to investing in Japan. Even JeffLee revealed here that despite his constant Japan economic management cheerleading he too owns assets underlied by foreign investments.

And while the central planners continue to trash the value of the yen, risk averse people who save their yen and don’t know better, are the ones taking the losses biggest. (They aren’t blameless, I imagine many of them keep voting for the same type of politicians.)

Rising prices continue to deal a blow to consumers in Japan where an increase in wages has not kept up with the soaring costs of goods and services.

The country's real wages fell for the 16th straight month in July, according to government data.

Meanwhile in Dubai, people are fighting over the newest iPhone.

However, Japan is a slow motion train wreck.

Japanese PMs spend more time dealing with and giving away, the ever depreciating yen to foreign countries than dealing with issues in Japan.

The days when the Japanese drank gold flaked sake and prolifically bought designer goods are long and have been for decades.

They are going to continue to print money irrespective of whatever wages might do.

I agree. This is the path of least pain.

Meanwhile in Dubai, people are fighting over the newest iPhone.

I was on an emergency call with our Dubai office yesterday about wage hikes and housing allowance hikes. Peer companies offer about 4% raises, but the staff was pretty upset as rents have gone up almost 100% and with unemployment low, they are still rising. Also, it is difficult to buy there as most workers are on short term work visas. On the other hand, the rent at my townhouse in Tokyo has actually gone down 5% over the past 11 years (although the fixtures and floor are getting old). In most of the rest of the world inflation in housing/rent is causing great pain. That is a huge benefit if you live in Japan with the falling population and lax zoning (i.e., I live in a rental townhouse near million dollar homes, also near one room rentals for average workers). In the US zoning is used as an extraordinary assertion of property right to constrain the property rights of others.

The only inflation I have seen in the last 40 years are bicycles, cars with electronics, beer big bottles used to be 300 yen and now 500, cigs much higher, but

Drink machines the same or cheaper, food the same, beef much cheaper, etc.

Used cars in great shape are still very cheap. Health insurance is cheap.

Very inexpensive to live here.

Surprisingly cheap to live in Japan. For a couple earning a professional salary, you can save bucketloads in this country.

Taxation is reasonable, medical bills are astonishingly low. Inflation is a gentle creep at best compared to other countries.

Smell the roses.

@Tamarama

Not correct.

"The inflationary pressure was somewhat moderated by the fall in energy prices stemming from government subsidies ( which will be borne on the shoulders of the taxpayers) to reduce household utility bills."

The people are getting fleeced coming and going.

Cuteusagi...

beer big bottles used to be 300 yen and now 500, cigs much higher,

Big beer bottles used to be ¥280 they are now ¥320.

Big beer bottles used to be ¥280 they are now ¥320.

In my Tokyo supermarket they mainly sell cans. With my drinking habit, large beer bottles would overwhelm my apartment. When I first came to Japan and lived in Oita, I would order a case of those large bottles and the liquor shop would deliver a new case (of 20 bottles I think) and take the empty ones. Pretty easy to identify the alcoholics walking around your neighborhood on can/bottle garbage days.

The cost of living is not too bad in Japan. Then again I'm from one of the most expensive places on the planet! Australia! Visited in August and I couldn't believe the prices! Love all the reasonable prices at Japanese supermarkets.

Yes Japan is dirt cheap for foreign tourists with the pathetic sinking yen. Not cheap for people who actually live in Japan with its real inflation rate of around 15% and no wage increases.