Japanese households will see their budgets further squeezed by a new wave of price hikes scheduled for October on food and services, while freelancers and those self-employed may have to shoulder higher tax burdens under a new invoice system.
The persisting effects of a weaker yen, which inflates the prices of imported raw materials, are largely blamed for the price hikes as more and more Japanese firms pass them onto consumers. This, in turn, threatens to dent consumer sentiment when real wages are not rising.
Prices of over 4,500 food items are set to increase in October, the start of the fiscal second half for many Japanese companies, more than double the figure in September, according to research firm Teikoku Databank. The number fell by half when compared with a year ago, but it still adds to the pain already felt by consumers as everyday goods have become pricier.