Higher inflationary expectations and price tolerance are taking root in Japan, a development that supports the central bank’s moves to normalize policy and raise interest rates further.
A recent survey by Tsutomu Watanabe, a leading inflation expert in the nation, found that Japanese consumers’ tolerance of price changes is holding up and is higher than levels seen among shoppers in some other major economies. The survey showed for the third-year running that more than half of respondents would continue to buy a product at the same supermarket even if prices rose by 10%.
The result is another indication that Japanese consumers are accepting inflation for the first time in decades, and are shedding their reputation for being among the most price-sensitive consumers in the world. The survey, which has been cited by the Bank of Japan in the past, suggests Japanese are more resigned to price hikes than their peers in the U.K., Germany and Canada.