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  1. Sudden lifestyle change
  2. Will the price spike end soon?

Wholesale price is rising rapidly and this is how the Japanese deal with it.

After more than two decades of deflation, as customers get used to businesses constantly cutting prices to boost consumption, Japanese people are shocked by all kinds of rising costs.

Source: Insider


Sudden lifestyle change

Surprised by the rapid increase in the price of fuel, food and a variety of other household goods in Japan, Kantaro Suzuki decided to "fight" inflation by… jogging. Suzuki is a freelance writer living in Tokyo, he said he has gained weight because of staying indoors for too long after the government's recommendation during the pandemic.

Source: Reuters

Currently, Suzuki is worried about a sharp increase in prices if he needs to buy larger sizes of clothes. "I can't afford a new wardrobe, especially if prices start to go up," he said. "That's why I started walking and jogging."
For Yuuki Bando, a business owner in southern Japan, the biggest worry is rising fuel prices. In response to this situation, she made the decision to buy more vegetables to reduce travel time.
“I use my car every day,” Bando said, “And fuel prices have gone significantly higher than a few months ago. Meanwhile, wages for most workers have not changed in more than a decade. But I have no other choice. I live in an area quite far from the city, so I need a car to move around."
After more than two decades of deflation, as customers get used to businesses constantly cutting prices to boost consumption, Japanese people are shocked by all kinds of rising costs.
Prices in the country rose for the first time in 18 months in September. Bloomberg estimates Japan's core inflation at around 1.4%. While this is due to the sharp increase in commodity prices, businesses are passing that burden on to consumers.
Among them is the Nisshin Seifun flour factory. The company announced an increase in product prices and posted an explanatory text on its website with charts, USD-YEN rates and increased freight rates.
Last Friday, food maker Kikkoman said it would raise the price of soy sauce, a key condiment in Japanese cuisine, by up to 10 percent from February. It was the first price hike since 2008 due to high cost of raw materials and logistics. In addition, they also announced a 5-6% increase in the price of soy milk.
A day earlier, the Bank of Japan said wholesale prices rose 8% in October from a year earlier, marking the strongest increase in more than four decades. The reason is that the increase in crude oil prices and the weakening yen have pushed up the cost of imported goods.
In Japan, prices of gasoline and coal products rose more than 44 percent, while prices for consumers climbed to a seven-year high. Similarly, the price of wood increased by 57%, while iron and steel and metal increased by nearly 22% and more than 31.4%, respectively.

Source: Japan visitor

Currently, households are also witnessing high service costs, with electricity, gas and water all increasing by nearly 11%. The government is expected to introduce measures to help ease pressure on households in a 55.7 trillion yen ($488 billion) economic stimulus package to be approved by the Cabinet today.

Will the price spike end soon?

Economic experts emphasized that Japanese people should not be too worried because supply chain problems will soon improve. In addition, fuel-producing countries are expected to ramp up production in the coming months.
“Japan has avoided even sharper price spikes not seen in other parts of the world, especially in Europe and North America” said Martin Schulz, chief economist at the Global Market Intelligence Unit at Fujitsu. America. In the energy sector, the reason for the price increase is that Japanese importers tend to sign very long-term contracts.
"If inflation is not the short-term trend and persists for more than two years in Japan, we will gradually see prices take a hit. However, I think supply chain issues will be removed, helping prices cool down. In the context of gasoline prices rising, I predict producers will increase output this winter."
In addition, according to Shulz, anxiety has become more common in relation to overall inflation. "Japanese companies are importing at a higher cost but don't want to pass that burden on to consumers, because the sentiment during deflation has persisted," he said.
The expert commented: "Although we have seen purchasing power in Europe and the US during the pandemic have eased, Japanese consumers are still hesitant to spend, as if they are still in emergency. However, if the cost increase is not passed on to consumers, companies' profits could suffer."

Source: The Japan Times

In Saitama Prefecture, north of Tokyo, housewife Ayako Ueda, again, finds her own way. She plans to grow vegetables in the garden next to her house. "We try to eat healthy," said Ueda, "my family also loves vegetables and fruits. However, I can see prices changing in recent weeks."
She shared: "My husband and I also had to cancel some weekend trips because I kept seeing information about fuel prices going up. We hope things will be better next spring. "
Returning to Suzuki, he also changed his lifestyle, canceling outings with his wife and even cutting back on the amount of money they spent on alcohol. "We've lived in deflation or flat prices for so long, we haven't noticed the difference. But the people I know are changing their spending patterns all of a sudden," he said.
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