This is their second price increase this year. In March this year, McDonald's in Japan announced a 20% price increase, citing the rise in beef and wheat prices.

reporters on the Taiwan Channel look at the world! Hello everyone, I am Liu Zhuoye, a reporter from the Central Station in Japan. Today I will talk to all the listeners about a hot topic in Japan, and prices are rising.

From bread and milk to electricity and gas prices, prices have "risen"

Speaking of this, let me talk to you about McDonald's burgers. In cities in Japan, McDonald's restaurants can be said to be everywhere, and I often buy hamburgers and other lunches.

A McDonald's restaurant in Japan (photo taken by Liu Zhuoye)

In the past few days, I have found that McDonald's burgers have become much more expensive overnight. A giant burger rose from 390 yen to 410 yen. Japanese McDonald's recently stated that due to the surge in raw materials, labor, energy, logistics prices and fluctuations in the yen exchange rate, starting from September 30, 60% of the products in Japanese McDonald's fast food restaurants will increase the price by 10 yen to 20 yen. This is their second price increase this year. In March this year, McDonald's in Japan announced a 20% price increase, citing the rise in beef and wheat prices.

Within half a year, the food sold at McDonald's in Japan has increased its price twice (photo taken by Liu Zhuoye)

McDonald's is just a microcosm. Let me take the daily day of ordinary Japanese people as an example: when I wake up in the morning and open the refrigerator and want to prepare a milk bread breakfast, I start to see various price increases - Japanese Meiji, , Morinaga and other food companies announced that starting from November, their respective milk, yogurt, milk powder and other products will increase their prices one after another, and a box of 400 grams of Meiji yogurt rose from 260 yen to 270 yen; bread manufacturers such as Yamazaki and Shikishima have also increased their prices long ago. If you are thirsty, you want to buy a bottle of drinks - beverage products under manufacturers such as Suntory , Kirin, Asahi , Japanese Coca-Cola have also increased prices in full swing since October, with the largest increase in to 20%.

All kinds of beverage products have also increased prices across the board (photo by Liu Zhuoye)

At noon, I want to have a fast food. Yoshinoya , Skylark Catering, McDonald's and other common fast food stores in Japan have all increased prices again. A beef rice bowl has increased from 426 yen to 448 yen. When you go home at night and see various bills, you will find that the rise in energy prices such as electricity and gas bills is even more fierce. A few days ago, I received a notice from the gas company, informing me that the gas price will be raised from October.

Gas price increase notice received by reporters (photo taken by Liu Zhuoye)

According to Japanese media reports, in October, nearly 6,600 products raised their prices, with an average price increase of more than 15%, making it the month with the largest increase in Japanese commodity prices in 2022. The rise in prices has increased the average annual expenditure of Japanese households by more than 170,000 yen, or about 8,500 yuan. It should be said that the Japanese people have truly felt the impact of rising prices on their lives this year.

Exchange rate "falls and falls". The annual per capita wage "falls" back to 1990

Accompanying the "rise and rises" of prices, the Japanese yen exchange rate against the US dollar has been falling all the way. At the beginning of this year, around 113 yen could be exchanged for 1 US dollar, but now it costs more than 144 yen to be exchanged for 1 US dollar, with a drop of more than 27% in 9 months. Reflecting on the lives of ordinary people, if wages are calculated at the current exchange rate, Japan's annual per capita wage has shrunk to US$30,000, returning to the level around 1990. Similarly, GDP, calculated in US dollars, has naturally shrunk - 10 years ago, Japan's nominal GDP exceeded US$6 trillion, 80% higher than Germany that year, but this year it may be lower than US$4 trillion, almost the same as Germany.

Exterior view of a Yoshinoya restaurant in Tokyo (photo by Liu Zhuoye)

The reason for the drastic exchange rate changes is, in addition to its own economic situation, a particularly important reason is the continuous hike of in the United States. Since March this year, the United States has raised interest rates for five consecutive months, with a cumulative interest rate hike of 300 basis points. In order to achieve the inflation target of more than 2% to stimulate economic development, the Japanese government has been unmoved in the exchange rate. This has caused the interest rate spread between Japan and the United States to expand. On September 22, the yen exchange rate fell below 1 US dollar to 145 yen. The Bank of Japan finally couldn't hold back and decided to intervene. Through the operation of selling the US dollar and purchasing the yen, the yen exchange rate rose rapidly, and the exchange rate rebounded to around 140 at night that day.However, due to the long-term interest rate spread, the exchange rate quickly returned to above 144. It can be said that the yen exchange rate is still difficult to see a reversal improvement. The Bank of Japan and the Japanese government are indeed facing a dilemma now: if the exchange rate is insisted on raising, the cost of Japan's economic operation will increase, and export costs will also increase, and Japan's dependence on external markets is quite high. But at the same time, the decline in exchange rates will lead to an increase in the prices of imported commodities, and Japan's economy is highly dependent on foreign countries, and requires large-scale imports from grain to oil. This kind of imported inflation has undoubtedly become an important factor pushing up prices.

Japan's major dairy companies have successively raised dairy prices. The picture shows dairy products on a container in a supermarket in Tokyo (photo by Liu Zhuoye)

Can the Japanese government intervene "Lost time" come back?

Prices rose, and the exchange rate plummeted, naturally attracted high attention from the Japanese government. On September 30, Japanese Prime Minister Kishida Fumio held a cabinet meeting to discuss corresponding countermeasures, and announced that he would formulate "comprehensive economic countermeasures" within October to deal with a series of problems brought about by the current high prices and the depreciation of the yen. Among them, the corresponding countermeasures for energy prices such as natural gas and electricity have attracted widespread attention. However, during the peak electricity consumption this summer, the Japanese government implemented the "Power Saving and Exchange Consumption Points" activity, that is, after taking corresponding power saving measures and achieving the goal, the points can be collected directly for commodity consumption. The original intention is to achieve the effect of "save electricity consumption, reduce people's expenditure, and promote market consumption", but judging from the current reactions of all parties, the effect of the activity is not obvious. Therefore, many people are still skeptical whether the upcoming "comprehensive economic countermeasures" can play a positive role in people's livelihood economy.

or above is the observation of Liu Zhuoye, a reporter from the Taiwan Channel, in Japan.

This issue of "Central Taiwan Reporter Looks at the World" Author: Central Taiwan Reporter Liu Zhuye

(from China Voice column "Central Taiwan Reporter Looks at the World")

Producer丨Zhang Chengxia

Reporter丨Liu Zhuye

Editing丨Yang Bo