When Japanese ice pop maker Akagi Nyugyo raised its prices a meager ￥10 in 2016, its somber-faced management appeared in a one-minute commercial, bowing silently in apology as a melancholy folk song lamented the inevitability of price hikes.
Almost a decade later, the Saitama-based company has changed its tune — a tongue-in-cheek advertising campaign last year promised in a series of photos to bow successively deeper for each of its next three price hikes.
The lighter-hearted spin comes as Japanese firms, after decades of deflation, find a rare moment that allows them to raise prices without triggering the intense public backlash that once made such moves taboo.
“Compared to when we raised prices in 2016, I’d say there’s more of a sense now that the public is more accepting of price hikes,” the company’s marketing team leader Hideyuki Okamoto said. “The sentiment that price hikes are evil is receding.”
That shift in consumer mindset is driven by the biggest pay hikes in three decades and has given companies more confidence to pass on rising costs — something they long avoided for fear of losing customers. If sustained, the change could embolden the central bank to further raise interest rates, although that is dependent on just how much more households can absorb. The Bank of Japan is expected to keep its benchmark rates unchanged at this week’s policy meeting, but could signal its intention to resume rate hikes later in the year.
Japan’s consumer inflation has stayed above 2 percent for three years, driven largely by rising food prices, a sharp departure from the decades of near-zero inflation that followed the asset bubble collapse in the early 1990s. Nearly 200 major food makers expected to hike prices for 2,105 items last month — up fivefold from year-before levels — by an average 15 percent, a private think tank survey showed recently.
“A few years ago, people would make a fuss over one or two items going up. Now it’s dozens, even hundreds. You can’t keep track anymore. There are just too many to remember,” said Fusako Usuba, a 79-year-old pensioner.
“But there’s no way around it, because we all need to eat to survive,” she added.
Japan’s wave of price hikes initially began in 2022, triggered by external shocks such as post-pandemic supply chain disruptions, the war in Ukraine and the yen’s subsequent depreciation.
However, economists say it is consumers’ greater tolerance for higher prices — underpinned by three straight years of robust wage growth — that has kept the trend going.
“Japanese consumers have come to realize they are now living in an era of persistent price increases,” said Tsutomu Watanabe, emeritus professor of economics at the University of Tokyo.
Consumers are beginning to shift their focus from low prices to higher wages, as intensifying labor shortages give workers more bargaining power, he said.
According to a survey led by Watanabe, Japanese consumers were the most resistant to price hikes among five major countries four years ago, with a majority saying they would switch supermarkets if prices rose by 10 percent.
In the same survey last year, most said they would continue shopping at the same stores and buying the same items, bringing them in line with consumers in other countries.
The key question now is whether the trend is sustainable.
Meiji, Japan’s top chocolate maker, has launched nine price hikes since 2022, reflecting soaring cocoa costs.
“Back in 2022, we met resistance from retailers asking us to hold off a bit longer,” said Akira Yoshida, general manager at Meiji’s cacao marketing division. “Nowadays, they accept our price hikes more smoothly, so we assume their customers are also reluctantly going along.”
Meiji, which holds a 25 percent market share and effectively sets industry prices, is now seeing signs of price fatigue.
A 20 percent price hike in June, the biggest in recent years, led to a more than 20 percent drop in sales volume at some retailers, unlike in previous rounds where volume declines were smaller than the scale of price hikes.
“We’re increasingly concerned. There’s only so much more we can raise prices,” Yoshida said. “I think we’ll need to change how people view chocolate — not as a commodity, but as a luxury.”
Rei Ihara, food sector analyst at UBS Securities, said the scope for further price hikes is narrowing, as Japan’s Engel coefficient, the share of household spending on food, hit 28.3 percent last year, the highest in 43 years.
“With prices rising year after year, consumers appear to be adjusting their purchasing habits, opting for less expensive options like chicken instead of beef, for example. For inflation to be sustainable, it must be supported by solid wage growth,” he said.
Inflation has outpaced nominal pay gains, pushing real wage growth into negative territory for months, fueling frustration among voters that led to a major defeat of Japanese Prime Minister Shigeru Ishiba’s coalition in recent house elections.
The outlook for wage growth is increasingly uncertain due to sweeping US tariffs. Japanese exporters have so far avoided major price hikes in the US to stay competitive, sacrificing profits. If that continues, it could limit their ability to raise wages next year.
“We’re at a turning point now,” Watanabe said. “If this wage-driven price momentum fails, we may not see another opportunity like this in our lifetime. This moment is that rare.”
Elbridge Colby, America’s Under Secretary of Defense for Policy, is the most influential voice on defense strategy in the Second Trump Administration. For insight into his thinking, one could do no better than read his thoughts on the defense of Taiwan which he gathered in a book he wrote in 2021. The Strategy of Denial, is his contemplation of China’s rising hegemony in Asia and on how to deter China from invading Taiwan. Allowing China to absorb Taiwan, he wrote, would open the entire Indo-Pacific region to Chinese preeminence and result in a power transition that would place America’s prosperity
When Democratic Progressive Party (DPP) caucus whip Ker Chien-ming (柯建銘) first suggested a mass recall of Chinese Nationalist Party (KMT) legislators, the Taipei Times called the idea “not only absurd, but also deeply undemocratic” (“Lai’s speech and legislative chaos,” Jan. 6, page 8). In a subsequent editorial (“Recall chaos plays into KMT hands,” Jan. 9, page 8), the paper wrote that his suggestion was not a solution, and that if it failed, it would exacerbate the enmity between the parties and lead to a cascade of revenge recalls. The danger came from having the DPP orchestrate a mass recall. As it transpired,
A few weeks ago in Kaohsiung, tech mogul turned political pundit Robert Tsao (曹興誠) joined Western Washington University professor Chen Shih-fen (陳時奮) for a public forum in support of Taiwan’s recall campaign. Kaohsiung, already the most Taiwanese independence-minded city in Taiwan, was not in need of a recall. So Chen took a different approach: He made the case that unification with China would be too expensive to work. The argument was unusual. Most of the time, we hear that Taiwan should remain free out of respect for democracy and self-determination, but cost? That is not part of the usual script, and
All 24 Chinese Nationalist Party (KMT) lawmakers and suspended Hsinchu Mayor Ann Kao (高虹安), formerly of the Taiwan People’s Party (TPP), survived recall elections against them on Saturday, in a massive loss to the unprecedented mass recall movement, as well as to the ruling Democratic Progressive Party (DPP) that backed it. The outcome has surprised many, as most analysts expected that at least a few legislators would be ousted. Over the past few months, dedicated and passionate civic groups gathered more than 1 million signatures to recall KMT lawmakers, an extraordinary achievement that many believed would be enough to remove at
RSS