A Tokyo office worker was surprised in mid-October when his meal at CoCo Ichibanya curry chain reached 1,992 yen ($12), thanks to a new late-night surcharge. The 49-year-old had already adjusted his order to avoid hitting 2,000 yen, only to see an additional 130 yen added. This reflects a broader trend in Japan where companies are increasingly passing rising labor costs onto consumers.
CoCo Ichibanya raised prices on 12 toppings by an average of 17 percent in September and introduced a 7-percent late-night surcharge. The chain’s president, Mamoru Kuzuhara, cited higher raw material and labor costs as reasons for the changes. Data from Teikoku Databank shows that labor costs have surged from 10 percent in January 2023 to 66 percent in January 2026.
Japan is experiencing a third wave of inflation, driven by higher raw material costs and the Middle East crisis earlier this year. The core consumer price index rose 2.1 percent year on year in September, exceeding 2 percent for the first time in nine months. Companies like Ringer Hut and Kewpie Corp. have also raised prices, with some seeing customer acceptance despite initial fears of backlash.
However, not all companies can pass on higher costs. Bankruptcies due to high prices rose about 30 percent in the first half of fiscal 2026. Experts like Makoto Saito from Kokugakuin University question the government’s “virtuous cycle” of rising wages and prices, arguing that wage increases should come from productivity gains, not price hikes. Tsutomu Watanabe of the University of Tokyo warns that inflation fueled by rising wages and prices requires careful management.