The yen’s slide against major currencies since late last year is beginning to hit households in the pocket by raising prices of daily necessities.
The average price of regular gasoline climbed ¥1.20 from a week earlier to ¥150 per liter as of Tuesday, a level not seen since last May, the Natural Resources and Energy Agency said Thursday.
Gasoline prices have risen for the past six weeks. Kerosene prices have meanwhile spiked in the past seven weeks, with the average hitting ¥1,759 per 18 liters, up ¥39 from a week earlier.
These increases have been observed since late November, when it became clear that the election in December would give birth to a new government led by Shinzo Abe, an advocate of bold fiscal policy and credit easing. This was also about the time the yen’s slide started.
The dollar hit ¥90 in late trading in New York on Thursday, the highest level in two years and seven months.
In the wake of the yen’s sharp falls against the dollar and euro, some Cabinet members have expressed concern about the impact on people’s livelihoods, including through costlier imported food and clothing.
“A rapid fall in the yen’s value may well push up import prices,” said Tatsuo Amano, an executive director of Nippon Flour Mills Co.
If the yen stays weak over a prolonged period, imported wheat prices will rise, which in turn will lead to increases in the prices of bread and noodles.
Imported meat, vegetables and fruit may also increase if retailers are renewing purchasing contracts in the months ahead.
Nitri Co., which sells furniture and home interior goods, is in a tough position because it imports many of its products. A rise in the dollar by ¥1 translates into a ¥1.1 billion increase in annual costs, the company said.
In the clothing market, department store chain Takashimaya Co. said prices of European luxury brands may rise.
“Excessive weakness in the yen’s value will impact import prices and have an adverse impact on the livelihood of the nation,” economic and fiscal policy minister Akira Amari said Tuesday.
The remark sparked dollar selling, pushing up the yen’s value temporarily. In the exchange market, however, the prevailing view is that the trend of yen weakness will stay unchanged.