Yen is the lowest in 20 years, Japan is worried about economic recovery
Long Nguyen (TV reporter in Japan)–Wednesday, June 8, 2022 06:00 GMT+7
Daiso Japan – Japan’s famous same-price supermarket brand always boasts low prices and a wide variety of items, all products are sold for 100 Yen, equivalent to about 17 thousand VND. This is a place that is welcomed by Japanese consumers, especially those with low incomes. However, the Russia-Ukraine conflict disrupting the supply chain. Plus weak yen making it difficult to import goods and making prices uncompetitive as before.
Mr. Goto Koichi – Representative of Daiso Japan’s External Relations Department said: “About 70% of our goods are imported from abroad. Due to the increase in transportation fees, gasoline prices, and a depreciating local currency, business costs are increased. much higher than before.”
Price pressure is increasing when in the morning session of June 7, the Japanese Yen fell to the lowest level in more than 20 years against the USD. The recent weakening of the Yen has made imported goods more expensive, thereby pushing up commodity prices on a large scale.
“We are closely monitoring developments in the foreign exchange market and their impact on the Japanese economy,” said Mr. Shunichi Suzuki, Japan’s Finance Minister.
The basic consumer price index (CPI) of Japan in April 2022 increased by 2.1% over the same period last year, this is the highest increase in the past 7 years. Meanwhile, the rate of wage growth in Japan is still very slow.
Three out of the last five quarters of negative growth
Japan’s consumer price index (CPI) in April increased by 2.1%, exceeding the 2% target set, however, Bank of Japan Governor Kuroda said that the main inflation trend Weaknesses stem from the price of food and energy, this is only a temporary trend, and lacks sustainability.
The central bank forecasts that the country’s average inflation in fiscal year 2022 may reach 1.9%, but then decrease to 1.1% in fiscal years 2023 and 2024.
To create a driving force for economic growth, the Bank of Japan said that it will continue to implement large-scale monetary easing policies to maintain stable inflation at 2%, even while other major central banks are tightening monetary policy.
What does the Japanese government do to control price increases?
Currently, the Japanese Government has launched an additional economic stimulus package, if the contribution of the private sector is included, the stimulus package is worth 13.2 trillion yen (more than 100 billion USD). In which, 1,500 billion yen additional to reserve funds to cope with high crude oil prices, extending the gasoline subsidy program until the end of September. About 1.3 trillion yen to provide low-interest loans to SMEs, or subsidize restructuring activities to cope with high inflation.
Another 1.3 trillion yen is earmarked for programs to support low-income households and others in need. In addition, Japan has also extended support to businesses related to fishing, wood processing and wheat production to ensure a stable supply of energy, raw materials and commodities. food.
There is a tradition in Japan that Japanese companies often sacrifice profits to accommodate rising costs, but if inflation continues to go up, they will most likely have to charge consumers more. use. In the immediate future, the Japanese Government has announced an extension of subsidies for oil wholesalers to reduce retail prices. This is an urgent measure to stop the current price increase.
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