Price increases are prompting Japanese shoppers to buy less mayonnaise, showing the fragility of any economic rebound unless wages keep up with living costs.
Production of the sauce fell 5.1 percent in the five months that ended on Nov. 30 from a year earlier, which partly reflected stockpiling before Kewpie Corp. hiked prices by as much as 9 percent in July, followed by Ajinomoto Co. in August. The cost of living in Japan, excluding fresh food, climbed at the fastest pace in five years in November, even as salaries continued a tailspin that started in June 2012.
Lower earnings, higher prices and a looming tax hike present a triple burden for households in the world's third-largest economy, prompting Bank of Japan Gov. Haruhiko Kuroda to urge regional business leaders to raise basic pay. While swaps indicate annual inflation of 2.12 percent for the next two years, economists surveyed by Bloomberg News said the BOJ will modify or abandon its 2 percent target.