‘So expensive’: Japan consumers, businesses feel the pinch as higher inflation bites

Residents are cutting down expenses on food, travel and other items to cope with rising prices, survey shows

Core consumer inflation hit 40-year high in October, accelerated by high energy prices and a weak yen, but Bank of Japan says it is unlikely to last

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People look at an outdoor display for items outside a drugstore chain store in downtown Tokyo. The Bank of Japan said inflation was up for a 14th consecutive month. Photo: AFP

Published: 8:30am, 22 Nov 2022Updated: 12:31pm, 22 Nov 2022

Japanese consumers are dramatically cutting back on spending as the cost of goods and services continues to rise, while businesses are increasingly concerned the nation’s penny-pinching may be the final nail in the coffin after three years of pandemic hardship.

A study conducted in October by Sumitomo Life Insurance Co. confirmed that more than 87 per cent of the 5,005 people interviewed said rising prices had affected family finances to some degree. As a consequence, nearly 73 per cent said they were actively looking to cut expenses.

The cost of food was most keenly felt, followed by utility bills and the cost of vehicle fuel, the study showed. Just 12 per cent of people said they had not seen an increase in their everyday costs.

In response to the new pressure on their purses, 42.6 per cent of people said they were spending less on food, and more than 36 per cent were cutting back on travel and leisure pursuits. More than 21 per cent of men said they were spending less on going out, while one-third of women were buying fewer clothes and more than 28 per cent said outlays on cosmetics and beauty products were down.

Families with children are also feeling the pinch, with 16 per cent of respondents saying they have had to withdraw their children from after-school classes and more than 22 per cent having reduced the frequency of extra lessons.

“Things are already quite difficult and it seems that every time I go to the supermarket, the cost of several things has gone up again,” said Yae Oono, who lives in Kawasaki and works part-time to contribute to the family budget. “I have particularly noticed that imported fruit, like bananas or pineapple, are more expensive.”

Customers at eateries in Omoide Yokocho, in the Shinjuku area of Tokyo. Consumers said they were spending less on food and going out, according to a survey in October. Photo: AFP

That experience tallies with recent government statistics, with authorities confirming on Friday that Japan’s core consumer prices had leapt 3.6 per cent in October from one year previously, the fastest rate of increase in nearly four decades and significantly higher than the Bank of Japan’s inflation target of 2 per cent.