Japan Records Largest Price Increase in 8 Years at 2.3% in 2022

Japan’s consumer prices rise to eight-year high in 2022, government reports

Japan’s consumer prices rose 2.3% in 2022, marking the highest annual rise since 2014 and the highest annual growth of the index since 1991, the government reported on Friday.

The increase in prices in the whole of last year was mainly caused by the increases in fuel, electricity, water bills, and other everyday products.

The consumer price index (CPI) rose 4% in December alone, the highest rate of increase since 1981. This is the 16th consecutive month of increase in the indicator, differentiating from 2021 and 2020 when the CPI contracted.

According to Hirokazu Matsuno, government spokesman at the press conference, the rise in prices “reflects the increase in the cost of everyday products, such as energy, due to the rise in the price of raw materials and weakening of the yen”.

The Bank of Japan (BoJ) had set a 2% inflation target for 2022, which has been surpassed for nine consecutive months. It held a meeting two days prior to the internal report, where it was decided the interest rates would stay unchanged.

The extreme difference between Japanese policies and those of the other international counterparts has caused the yen to plunge, thus affecting the country’s import prices.

Matsuno maintained the government will “continue its efforts so that companies raise wages in a resistant manner in the face of rising prices through general economic measures”.

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