The first increase in Japan’s inflation rate in four months was recorded by the country’s Ministry of the Interior and Communications in October, NHK television channel reported on November 24.
According to the department, the consumer price index during the reporting period increased by 2.9% compared to October 2022. The indicator did not take into account the price of fresh foods, which fluctuates greatly due to changes in weather conditions.
The probable reason for the new increase in the rate of price increase was the reduction in the amount of subsidies allocated by the government. To combat the effects of inflation, the government offsets households’ gas and electricity bills, but in October the amount of this aid was halved.
At the same time, the food price index increased by 7.6%. The cost of living has increased by more than 40%, which is associated with a significant recovery in demand for housing by tourists.
Tourist flows to Japan in October exceeded pre-pandemic levels. The number of foreigners may be growing in the context of the observed depreciation of the national currency.
Let us remember that for several decades the Japanese authorities have been fighting against the opposite phenomenon: deflation. Since 2012, they have been pursuing ultra-liberal policies aimed at increasing the money supply and accelerating inflation.
However, the 2% target was not reached until after the introduction of sanctions against Russia in 2022. In January 2023, the inflation rate reached 4.2% and already at the end of 2022 the government decided to fight the inflation.
Source: Rossa Primavera
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