Japan\’s rice price surge doubles, sparking pressure on PM
Rice Prices in Japan Skyrocket 99.2% YoY in June
Official data released Friday signals that Japan’s core inflation rate slowed to 3.3% in June from 3.7% in May, slightly below market expectations of 3.4%.
Key Highlights
- Rice Prices: Yields surged 101% YoY in May, 98.4% in April, more than 92.5% in March.
- Core Inflation: Excluding volatile fresh food, consumer prices rose 3.4% in June, 3.3% in May.
- Public Support: Ishiba’s approval has dipped to its lowest level since October, partly due to frustration over cost of living.
Political Implications
The 68‑year‑old leader’s coalition lost its majority in the lower house in October, the worst election result for the LDP in 15 years. Opinion polls suggest the ruling coalition may lose its majority in the upper house as well, potentially forcing Ishiba to resign after less than a year in office.
Trade Pressure from the United States
Ishiba is under additional pressure to reach a trade deal before new U.S. tariffs of 25% take effect on August 1. Japan’s imports of auto, steel and aluminium face painful levies. U.S. President Donald Trump wants Japanese firms to manufacture more in the United States and Tokyo to buy more U.S. goods—including gas, oil, cars and rice—to reduce the $70 billion trade deficit.
Factors Behind Rising Rice Prices
- Shortages: A hot and dry summer two years ago damaged harvests nationwide.
- Hoarding: Some traders hoard rice to boost profits down the line.
- Panic Buying: Last year’s panic buying was prompted by a government warning about a potential “megaquake” that did not strike.
- Emergency Stockpile Release: The government released its emergency rice stockpile since February—a rare step usually reserved for disasters.
