Recently, Japanese companies have all been busy with one thing: raising prices. According to Nikkei Asia, Japanese food giant Glico raised prices by 3% to 15% on 164 products including the Pritz brand shipped in October; Yakult increased prices on 12 products; fried soybean snack Miino raised its prices; infant formula Puremilk went up by 15% per can; and Japan Tobacco's tobacco sticks rose by 40 yen per pack. A survey by Teikoku Databank shows that in October, a total of 3,153 food products in the Japanese market saw price increases, and combined with nearly 5,000 food products that rose in price in September, roughly three times the number from the same period last year, this wave of price hikes, the largest of the year, is heading straight for Japanese dining tables. Why is all of Japan trapped in the word "rise"? Simply put, Japan is being squeezed by multiple forces at once: global geopolitical storms, domestic cost dilemmas, and the depreciation of the yen.

Let's look at geopolitics first. More than 90% of Japan's crude oil imports depend on the Middle East. The U.S.-Iran conflict has pushed up global oil prices, making Japan the hardest-hit among major economies. Data from the Bank of Japan shows that in July, the import unit price of crude oil denominated in yen soared by about 78% year-on-year. Oil is the food of industry and the lifeblood of logistics. When oil prices rise, costs across the board for Japanese companies surge. For example, when Megmilk Snow Brand adjusted its milk powder prices, the reasons it gave included more expensive packaging materials and logistics. The depreciation of the yen has further amplified the procurement burden. Since July, the yen's exchange rate against the U.S. dollar has repeatedly fallen below the 1:160 mark, and expenditures for many Japanese companies heavily dependent on imports have climbed sharply, with cost pass-through linking one ring after another, and prices rolling toward the end consumer like a snowball.

In fact, if one looks only at CPI, the wave of price increases does not seem very serious: in August, Japan's core CPI, or consumer price index, rose 1.7% year-on-year, narrowing from July. But the market believes this is merely a "policy illusion." Shinichiro Kobayashi, chief researcher at Mitsubishi UFJ Research and Consulting, said the slowdown in core CPI growth was mainly due to government fiscal subsidies for electricity and gas bills. After the subsidies end, the pass-through effect of higher energy prices is expected to continue, and frequent natural disasters may also cause widespread shocks to areas such as food. Subsidies can provide emergency relief, but they cannot cure the root cause. The pressure on ordinary people's dinner tables has not eased at all. Under multiple shocks, the fire of inflation in Japan is still far from burning out. Nikkei Asia, citing data from the Japan Center for Economic Research, reported that economists on average expect Japan's core inflation rate to be 2.52% in October-December this year and 3.08% in January-March next year. The Bank of Japan has also warned that there is a risk CPI will accelerate above 2% in the second half of fiscal 2026.

The pain that inflation brings to the Japanese public is deepening. Teikoku Databank predicts that, based on the current trend, about 20,000 food products in Japan will see price increases for the whole year. "The lives of elderly people in Japan and those with unstable employment will become more difficult because of rising prices, and the wealth gap will further widen," said Japanese economist Hideo Kumano. At the same time, because of rising prices, the public may lose trust in government policies, leading to increased political instability. To curb inflation, the Bank of Japan raised interest rates by 25 basis points this month to 1.25%, the highest level in 31 years. The reason for the hike explicitly mentioned "curbing oil price increases and the depreciation of the yen." But raising rates is a bitter medicine. Japan's economy is already weak, and a rate hike may further suppress consumption and investment. In particular, if the U.S.-Iran conflict becomes prolonged, Japan may raise rates more than once within the year, and economic growth may become even more difficult. The Japan Research Institute warned that if the Strait of Hormuz is blocked for a long time, Japan's annual GDP could plunge by 3%. From corporate announcements to supermarket shelves, from the lifeline of energy to monetary policy, Japan is caught in a dilemma between inflation and growth. Subsidies can suppress it for a while, and rate hikes can treat one end, but geopolitical risks, transport bottlenecks, and currency weakness are intertwined, forming a net that is hard to escape. The crisis at Japanese dinner tables shows no end in sight in the short term. (Inflation Shock Reaches Historic Intensity, Japanese Households Feel the Squeeze at the Dinner Table)