Japanese consumers are facing a relentless wave of price increases as a plunging yen and soaring raw material costs continue to drive up the cost of living.
According to a recent survey by the Japanese private research institute Teikoku Databank, more than 20,000 products are expected to see price hikes by the end of the year.
The Japanese yen plunged into the lower 162 zone against the U.S. dollar on Tuesday, hitting its weakest level since December 1986.
The currency's sharp depreciation, coupled with the turbulent situation in the Middle East and surging global commodity prices, has dramatically increased inflation pressure on Japan’s economy.
According to Teikoku Databank's latest survey of 195 major food manufacturers in Japan, nearly 15,000 food and beverage items have risen in price so far this year, with another 2,566 items expected to see price jumps in July alone.
The survey suggests that food companies are accelerating the pass-through of surging costs to consumers, which will deal a heavy blow to ordinary citizens.
"Items we absolutely need for daily life, like eggs and vegetables, we used to buy them frequently. Now, the prices of all items have gone up, even the cheapest ones. Therefore, our food expenses have increased significantly," said a Tokyo resident.
Another resident expressed deep concern over the relentless inflation.
"Prices are rising too drastically, which is a huge blow to our family budget. My child is growing up and eating more, so I'm really worried about how high prices will eventually go," said the resident.
The continuous surge in food prices is also placing immense pressure on the retail sector.
Hiromichi Akiba, who has been running a supermarket in Tokyo for 35 years, noted that the combined pressures of rising commodity prices and increasing labor costs are severely squeezing supermarket operations.
"My overall impression is that many items are experiencing price hikes, and the increases are quite substantial. The situation is becoming increasingly evident, with more and more goods being affected. Costs for things like packaging materials are going up, and of course, labor costs in Japan are also rising continuously. All kinds of costs are climbing. Right now, we are doing our utmost and trying every possible way to cope with the situation," said Akiba.
Structural factors have exacerbated the issue, particularly Japan's heavy reliance on foreign imports, according to Hideo Kumano, executive director of the Japan Association for Financial Planners.
"The rise in food prices is because many ingredients are not sourced domestically in Japan but rely on overseas imports. Affected by the depreciation of the Japanese yen, the prices of wheat, soybeans, and corn have risen. This, in turn, has increased the costs of raising livestock such as pigs, chickens, and cattle. In other words, the weak yen is driving up overall food prices, which has now become an unavoidable source of inflationary pressure," said Kumano.
Japanese consumers face steep price hikes as yen plunges to 40-year low
