Prices are gradually rising. The Abe administration says that this is a sign that Japan is starting to beat deflation. But it is difficult to feel positive about the current situation because price rises are not being accompanied by higher wages. Thus households are being forced to shoulder a greater financial burden.
In May, the nationwide consumer price index, excluding perishable foods, compared with a year before emerged from a negative zone, with the index coming back to the same level as in May 2012. After that, it increased, though only slightly, for two consecutive months from the levels of the same months of 2012 — 0.4 percent in June and 0.7 percent in July. The June figure represented the first rise in 14 months.
The Bank of Japan's policy to achieve a 2 percent rate of inflation in two years, which reflects the Abe administration's economic policy, caused the value of the yen to decline. This in turn increased the costs of imported crude oil and liquefied natural gas, leading in turn to higher electricity and city gas prices for consumers. Hokkaido, Tohoku and Shikoku Electric Power companies will again raise electricity rates this month. And gasoline generally costs between ¥160 and ¥170 per liter.