Japan Faces Price Hikes on 614 Food Items in June Amid Higher Costs

by Ella

In June, Japanese consumers encountered price hikes on 614 food items, including confectionery and dairy products. The prolonged depreciation of the yen and adverse weather conditions have driven up import costs of raw materials, according to a credit research company.

Poor harvests caused by extreme heat and drought abroad have led to price increases in Japan for imported cocoa beans, coffee beans, olives, and various fruit juices, a survey by Teikoku Databank Ltd. revealed.


Prices for 68 products from Japan’s leading potato chip maker, Calbee Inc., including the popular snack Kappa Ebisen, rose by up to 10 percent from Saturday. Additionally, another company has raised prices for “natto,” the fermented sticky soybeans.


Household electricity and gas charges for June, based on May usage, increased across all of Japan’s major providers. Prime Minister Fumio Kishida’s government halved subsidies aimed at curbing power and gas bills at the end of last month.


With more firms expected to pass higher import costs onto customers due to the weaker yen, price rises are “likely to expand” in the latter half of the year, Teikoku Databank stated in a recent report.


Amid speculation that the Japan-U.S. interest rate gap will not narrow sharply soon, the yen has fallen to 34-year lows against the U.S. dollar. The government intervened in the currency market between April and May to address this issue.

In June, pension payments increased but failed to keep pace with the inflation rate. Patients also faced higher out-of-pocket expenses for medical care, potentially further undermining consumer sentiment.

To alleviate the impact of inflation, a 40,000-yen ($254) per person tax cut program began on Saturday. This initiative aims to make government support more visible to households as Kishida’s Cabinet, grappling with low approval ratings, seeks to address voter dissatisfaction.

However, analysts question the effectiveness of the program in boosting private consumption. Tepid domestic demand caused the Japanese economy to report its first negative growth in two quarters during the January-March period.

For the current fiscal year starting in April, Japanese households are estimated to bear an additional 106,000 yen in living costs compared to the previous year, according to Mizuho Research & Technologies Ltd.



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