Japan's Food Inflation Crisis Deepens Amid Weak Yen and Low Self-Sufficiency

Japan's food prices are rising as the country's low food self-sufficiency rate and weak yen combine to put pressure on household budgets. The country's Engel coefficient, which measures the share of food spending in total consumer expenditures, has risen to a record high of 28.6% for 2025, its highest level since 1981.

The main drivers of higher food costs include the pass-through of rising raw material costs into product prices and persistently elevated import costs for raw materials and energy. This leaves domestic food prices vulnerable to fluctuations in the value of the yen, which has lost value over time, leading to increased import costs and price pressures at the dinner table.

Japan's food self-sufficiency rate is a key concern, standing at just 37% on a calorie basis for fiscal 2025. This reliance on imports not only affects finished products but also the food production process itself, with imported goods making up 14.2% of directly used inputs in 2020, up from 10.0% in 2000.

The Japanese government has proposed a two-year cut to the consumption tax rate on food from 8% to 1%, but critics argue this is only a short-term fix and does not address the underlying issues driving food inflation.