Stagnant Prices, Wages Starting to Move, Govt White Paper Says

Jiji Press

12:24 JST, August 30, 2023

TOKYO (Jiji Press) — Japan’s prices and wages, which remained stagnant for many years, have started to move, a government white paper said Tuesday.

Japan must not miss the opportunity to end deflation, which has continued to plague the country since the 1990s, said the Annual Report on the Japanese Economy and Public Finance 2023, submitted to a cabinet meeting by economic and fiscal policy minister Shigeyuki Goto.

Deflation has been the main factor behind the slow growth of the world’s third-biggest economy as it hampers corporate investments and wage hikes.

Amid Russia’s invasion of Ukraine and a depreciation of the yen, prices have soared in Japan. The country’s core consumer price index rose 4.2% in January 2023, the fastest growth in over 41 years.

The soaring prices, however, were chiefly caused by higher import prices of energy, food and other items.

In the latest white paper, the government concluded that the country has yet to end its deflation, due to relatively slow growth of services prices, including those for education and travel services, that reflect the domestic wages and supply-demand situations.

Still, the wave of price increases has hit a wide range of goods and services. In April, the frequency of price changes for services rose to the highest level since 2001, excluding periods affected by consumption tax hikes.