Japan families brace for further price hikes as weak yen, inflation elevate ‘uncertainty’
- The yen’s decline to a 24-year low against the US dollar has set off alarm bells among consumers, companies over expectations of further price hikes
- Analysts expect the economic situation to improve from early 2023 as the government eases tourism restrictions and as the US economy strengthens
As the Japanese yen slumped to a 24-year low against the dollar, Japanese consumers and companies are bracing for more price hikes, especially for daily goods and staples, for the rest of the year as analysts warn of more yen instability ahead.
For the average Japanese consumer, the weak yen is being reflected in their weekly grocery bill, said Martin Schulz, chief policy economist for Fujitsu’s Global Market Intelligence Unit.
“The price of food pretty much across the board is rising, with the cost of imports up and even a lot of domestically produced foodstuffs also rising as livestock depend on imported feed, for example.”
The former bank worker said it was clear that a downturn was coming and has begun to cut little luxuries – a pack of expensive coffee beans, eating out, additions to her wardrobe – that she used to enjoy.
The Japanese government has attempted to calm growing fears over the state of the yen, with Chief Cabinet Secretary Hirokazu Matsuno saying on Thursday that rapid fluctuations in the value of the yen were “undesirable” and that currency rates should “move stably, reflecting economic fundamentals”.
