Prices and wages rising together — the "virtuous cycle" the government and the Bank of Japan have held up as the goal — still looks a long way off, according to two months of reporting on inflation that heard from consumers and companies.
The reporting began from a survey finding that shoppers have changed how they buy during the long stretch of rising prices, and that stores find it harder to lose customers even when they raise prices.
At a roundtable on saving money held in Tokyo at the end of September, a 45-year-old office worker described the squeeze on food. "You can't just not buy food," she said. "Every shop has raised its prices, so there's nothing to do but accept it."
Listening to the other participants, the reporter concluded that consumers are not choosing to stay with higher prices. They have no way out.
Companies raise prices together
Businesses have shifted too, with one describing the logic of raising prices as a group: if everyone lifts them, no one has to be afraid. The reporting also covers what it calls the "third wave" of inflation, and a night when a customer gave up the sausage topping at a CoCo Ichibanya curry restaurant.
Other coverage of the same subject has questioned the official framing. One economist argued that real wages cannot rise, and the Engel coefficient — the share of household spending that goes on food — has hit its highest level in 44 years, while wages have fallen about 3% in real terms over five years.