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Japan, land of deflation, rediscovers rising prices

Quite a symbol. Umaibo, these very popular popcorn bars in Japan, whose price of 10 yen (7.7 cents) had not changed since 1979, now cost 2 yen more (1.5 cents). This decision by confectioner Yaokin illustrates the new situation facing the Archipelago. The country, mired in deflation since the 1990s, has recorded an inflationary surge in recent months fueled by the explosion in the cost of energy and raw materials in the wake of the Covid-19 pandemic and the war. in Ukraine. A phenomenon exacerbated by the sharp drop in the yen against the dollar. According to the Bank of Japan, inflation could reach 2% in April, the target sought since 2013 by the central bank.

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This price increase is already being felt. ” I live on the country-side. Life is cheaper than in Tokyo. But I am worried, because electricity and gas bills have already increased by 20%”, admits a production manager – concerned about his anonymity – of an industrial group in Tochigi prefecture, north of Tokyo. His employer increased the average salary by 0.5%, or 1,500 yen (11.20 euros). “But the rise in prices erases that of the salary, I have the impression that we are constantly getting poorer”regrets this father of two children.

the shunto (“Spring Offensive”)these annual wage negotiations which have punctuated the lives of Japanese employees since 1954 – ended with mixed results. Admittedly, the average increase in remuneration reached 2.14%, or 6,581 yen (49.20 euros). Following Toyota, the group that gives the “the”, 776 large companies from all sectors accepted union demands on Thursday, March 24. The increase thus reached 2.6% at Hitachi, 2.5% at Toshiba…

Persistent corporate caution

Significant increases in a country where wages have stagnated since the Asian crisis of 1997. According to the Organization for Economic Co-operation and Development (OECD), the average salary in the world’s third largest economy was 35,044 euros in 2020 , against 34,934 euros in 1997. In South Korea, it jumped, over the same period, from 19,862 euros to 38,178 euros.

“The increases announced this year are a little better than expected, but the pace is still insufficient to stimulate the economy”, regrets Hisashi Yamada, an economist at the Japan Research Institute. They are also far from government expectations. Prime Minister Fumio Kishida, promoter of a “new capitalism”focused on a better redistribution of wealth, pleaded for a 3% increase.

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