A recent string of price increases are raising concern that the threat of inflation may be looming once again. The prices of canned tuna, pasta, ham and sausage products, mayonnaise, cup noodles and frozen foods have all risen. Taxi fares, electricity and gas bills may soon follow suit.
Food manufacturers have hiked their prices in response to rising costs for wheat, corn and other ingredients, which can be attributed to abnormal weather causing poor harvests and a growing use of biofuels.
More alarming is a steep rise in the cost of crude oil. On Sept. 19, oil prices topped a staggering $90 a barrel for the first time. Concerns about supply disruptions due to Turkey's possible military action in northern Iraq were one factor. Like gold, however, oil is becoming a target of speculators in the wake of market uncertainty caused by the U.S. subprime mortgage loan fiasco. As a result, consumers in Japan can expect to pay higher prices for electricity next year.
According to a monthly report, announced by the Ministry of Internal Affairs and Communications last week, the nationwide consumer price index (CPI), including fresh food and energy prices, logged a year-to-year monthly decline for consecutive eight months. The reason for the decline is that prices of high-tech products and key electric appliances, such as flat-screen TVs, notebook PCs, refrigerators and air-conditioners, continue to fall enough to offset rising prices in other areas.
As was the case with the oil crises and the bubble economy, external factors and pressures may trigger rampant inflation in Japan. Japanese consumers should remain vigilant against the recurrence of inflation by tightening their purse strings.