Higher fuel prices drove up Tokyo’s cost of living at the fastest pace in 16 months, although the increases were still tiny compared with those confronting consumers in other economies, where central banks are pulling back stimulus.
Prices in Japan’s capital, excluding those for fresh food, increased 0.3 percent last month from a year earlier, the Japanese Ministry of Internal Affairs reported yesterday.
The result matched the median estimate from economists.
Overall gains continued to be limited by plunging mobile phone fees, even as energy prices surged 14 percent, the most since 1981.
Japanese inflation, long a global laggard, is slowly but steadily picking up after climbing above zero at the end of summer amid spiking global commodity prices that have boosted costs for local businesses to a 40-year high.
The latest inflation data were released after Japanese Prime Minister Fumio Kishida on Wednesday announced the release of national oil reserves in concert with the US and other nations to cool surging crude prices.
Japan’s gasoline prices at the pump have risen to a seven-year high.
Still, the country’s consumer price gains remain far below the Bank of Japan’s 2 percent target, locking the central bank into its stimulus for the foreseeable future even as the US Federal Reserve and other peers start to change direction.
“Inflation is likely to keep rising gradually due to energy prices, but it won’t be sustainable until Japan has wage growth, more vibrant economic activity and companies are confident enough to raise prices,” Norinchukin Research Institute economist Takeshi Minami said.
A raft of government moves to help households and struggling businesses have also clouded Japan’s price picture.
A discount campaign to help the ailing tourism industry last year, for example, is now causing hotel prices to jump by more than 50 percent by comparison.
Those gains could unwind when the Go-To travel subsidies are reinstated as part of a stimulus plan announced by Kishida last week.
Meanwhile, the cost of phone service has plunged by about half under government pressure on telecoms to lower their fees.
Stripping that out, core inflation would likely hit 2 percent nationwide this month, Dai-ichi Life Research Institute said.
Rising energy and commodity costs, though, appear to be a consistent factor.
Bank of Japan board member Junko Nakagawa, in an interview with Bloomberg this week, said that she expects energy markets to exert upward pressure on Japanese prices along with a weaker yen, boosting the cost of imports.
Even as Japanese businesses grapple with climbing costs for raw materials, most are still reluctant to pass their pain on to consumers, who are known for being price sensitive after years of deflation and anemic wage growth.
One risk for the economy is if higher gas prices start to discourage shoppers.
Consumer spending is key to the recovery with COVID-19 restrictions easing, and with traditional growth drivers of trade and manufacturing being squeezed by global supply chain issues.
Zhang Yazhou was sitting in the passenger seat of her Tesla Model 3 when she said she heard her father’s panicked voice: The brakes do not work. Approaching a red light, her father swerved around two cars before plowing into a sport utility vehicle and a sedan, and crashing into a large concrete barrier. Stunned, Zhang gazed at the deflating airbag in front of her. She could never have imagined what was to come: Tesla Inc sued her for defamation for complaining publicly about the vehicles brakes — and won. A Chinese court ordered Zhang to pay more than US$23,000 in
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
‘NO DISRUPTION’: A US trade association said that it was ready to work with the US administration to streamline the program’s requirements and achieve shared goals The White House is seeking to renegotiate US CHIPS and Science Act awards and has signaled delays to some upcoming semiconductor disbursements, two sources familiar with the matter told reporters. The people, along with a third source, said that the new US administration is reviewing the projects awarded under the 2022 law, meant to boost US domestic semiconductor output with US$39 billion in subsidies. Washington plans to renegotiate some of the deals after assessing and changing current requirements, the sources said. The extent of the possible changes and how they would affect agreements already finalized was not immediately clear. It was not known
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective