Japanese companies plan massive food price hikes in July — Reuters

According to a study by the private think tank Teikoku Databank, Japanese food makers intend to hike prices for 2,105 items in July. The figure is five times higher than a year ago. The prices will increase by an average 15%. The reasons for these hikes include rising raw materials and energy prices, as well as costs of labor and transportation. 

Companies such as Ajinomoto AGF and Meiji have already announced raising prices for coffee, dairy products, and cheese. Japan experienced a similar price jump in 2022, when prices increased for over 25,000 food items due to more expensive oil and raw materials. According to Teikoku Databank, the continuation of this trend could fuel debate over hikes in borrowing costs by the Bank of Japan (BOJ).

The regulator held rates steady at 0.5% at its last meeting, despite inflation in Japan surging to 3.7% in May. BOJ Governor Kazuo Ueda believes price growth is currently driven by external factors rather than domestic ones. 

An economic survey of Japanese companies showing how businesses are reacting to higher prices and trade risks is due in the coming days. Analysts expect manufacturers' sentiment to worsen.