Japan Adapts to Sustained Inflation with Rising Prices and Spending Shifts

Japan is facing a prolonged period of rising prices, driven by a weak yen, higher raw material costs, and increasing wages. Supermarkets in Osaka have been adjusting price tags monthly, with over 4,900 products seeing increases in September alone. Consumers notice the gradual but steady rise in costs, such as soy sauce and milk, which have seen significant price hikes over the years. Gasoline prices also surged around 15% in 2022 due to global energy disruptions.

The weak yen has particularly impacted imported goods, with a loaf of bread doubling in price due to Japan's reliance on imported wheat. Consumers are becoming more selective, prioritizing necessities over discretionary spending. The weak yen has also affected entertainment, with music festivals like Summer Sonic struggling to afford international performers due to rising dollar-denominated fees.

Businesses are responding in different ways. Some, like an air freshener manufacturer, are raising prices to offset higher production costs. Others, such as a confectionery maker, are keeping prices stable by altering production methods. The government has approved a reduction in the consumption tax on food from 8% to 1% for two years, aiming to ease the burden on households, but businesses caution that higher costs may negate the benefits.

Farmers, however, are concerned about the tax reduction, as it may effectively decrease their income. Economists note that Japan's inflation has become persistent due to overlapping pressures, but there are signs of moderation. The challenge for households is finding ways to economize without making daily life unbearable, such as shopping less frequently and preparing meals with inexpensive ingredients.