Tokyo tower construction12/31/2023 ![]() My dad, for one, got a pay raise this year and bought a new car for himself and another for my brother," said Shohei Kanai, a 21-year-old student who himself expects a pay hike. "I certainly feel the positive effect of wage hikes is spreading. That was a big treat to myself," he told Reuters while strolling the upscale shopping district of Ginza. Prospects of higher wages are emboldening consumers.Īkihito Sato said the food company he works for had hiked wages this year. After agreeing to hike wages at the fastest pace in three decades this year, firms will remain under pressure to keep hiking pay next year due to a tight job market, analysts say.Ī survey in April showed 85.2% of hotels and 78% of restaurants complained of labour shortages, up from 77.3% and 56.1%, respectively, from a year ago, Teikoku Databank said. In a survey in April, 86 dine-out chains - or 70.4% of the total - hiked prices at least once since 2022, citing rising raw material and labour costs, Tokyo Shoko Research said. Services prices rose 1.7% in May from a year earlier with the cost of dining up 7.1% and leisure by 3.1%, data showed. ![]() However, those views have since changed after firms began passing on a spike in raw material costs, which pushed inflation above the BOJ's 2% target and kept it there for more than a year. Japanese wages have barely risen in the past decade, bogged down by entrenched expectations of weak inflation. "The next key question is whether this becomes a trend." "Japan is seeing early signs of progress in achieving inflation accompanied by higher wages," another source said, a view echoed by two more sources. The mood is clearly changing," said a source familiar with the BOJ's thinking. The BOJ is starting to drop signs that inflation is increasingly driven by improving consumer demand which, if sustained, could give new Governor Kazuo Ueda justification to pivot away from his predecessor's massive monetary stimulus. ![]() It is also drawing the attention of the Bank of Japan (BOJ), which is shifting away from its view the recent cost-driven inflation will prove temporary. The broadening in price increases from goods to services highlights a turning point in Japan's economy, where stagnant wage and services price growth has kept inflation subdued for more than two decades. ![]() "Our customers no longer think price hikes are something special." "There's no doubt rising wages and bonuses are among factors prodding customers to come dine with us despite the price hikes," said Ukai manager Yuka Hoshino. Ukai, a traditional Japanese restaurant near the landmark Tokyo tower, now charges up to 22,000 yen ($156) for its set menu, 24% more than last November. ![]() "Thankfully, higher prices haven't affected our business much with rooms fully packed through November," Hiroki Wakita, a staff at the hotel, told Reuters.įrench restaurant Robuchon in Tokyo has a waiting list of two months even though it hiked the price of its set menu dinner, which now costs up to $400 per person. The world's third-largest economy is seeing early signs of demand-driven inflation with an increasing number of hotels, restaurants and retailers now charging more for services - without losing consumers who are willing to pay more on prospects of higher wages.Īt Ougatou Hotel in northern Japan, the fastest selling rooms are the luxury suites with a private bath overlooking the mountainous surroundings - despite costing double the fee for a standard room and a 5% increase in charges that began in May. TOKYO - Japanese consumers may finally be shedding their decades-old frugal mindset, spending more on items that retailers were once too afraid to raise prices on and paving the way for the central bank to finally unwind its massive monetary stimulus. ![]()
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