In recent months, the prices of essential items in Japan have continued to rise due to the weakened Japanese yen and the impact of higher resource prices. Meanwhile, the number of corporate bankruptcies in Japan has risen for 10 consecutive months as companies struggle with rising costs.
The January index rose 4.2 percent year-over-year, more than double the Bank of Japan’s target increase of 2 percent.
Speaking with The Epoch Times on Feb. 25, Japanese political commentator Kenichi Yasuda predicted that prices of goods in Japan will continue to rise in 2023. Prices of everything from food, groceries, appliances, and fuel to dining out and entertainment “are all going up,” Yasuda said.
In addition, labor and logistics costs are also rising, he said. The main reason is the increase in global demand and the rising price of raw materials such as fuel and resources caused by the Russia–Ukraine conflict.
Meanwhile, the increase in oil prices has led to a rise in logistics and packaging materials costs.
Yasuda said the yen’s depreciation is another factor leading to rising prices.
Since most of Japan’s fuel and raw materials are dependent on imports, a weakening of the yen will increase the cost of imports, leading to higher prices of daily necessities and industrial raw materials.
The Surge of Corporate BankruptciesAffected by the yen’s depreciation and the increase in production costs, the number of corporate bankruptcies in Japan is also rising.
Among them, insolvent companies with debts of less than 50 million yen (about $370,000) accounted for 60 percent. This is also the 10th consecutive month that the number of corporate bankruptcies in Japan has risen. Meanwhile, for four consecutive months, all reported bankruptcies were small and medium-sized enterprises.
The number of bankruptcies in the service industry is the largest, followed by the construction, retail, and manufacturing industries. Among them, the manufacturing industry saw the most significant increase: 76 percent year-over-year.
Yasuda said that despite high raw material prices, the cost increases that many companies experienced was not passed on to customers. Fearing that raising prices could lead to lower sales and lost customers, companies kept price increases as low as possible or kept prices the same with slightly smaller portions.
However, more and more companies have been unable to afford the increased costs and have eventually had to raise the prices of their products.