Soy Sauce Is Getting More Expensive as Inflation Hits Daily Life

(Bloomberg) -- Higher prices for gasoline and kitchen essentials are already squeezing Japanese companies and households, raising concern about the strength of an economic rebound as Prime Minister Fumio Kishida mulls a stimulus package. 

Kikkoman Corp. said Friday it will raise the price of soy sauce, a key item for Japanese cuisine, by up to 10% from February in its first price hike since 2008 due to rising raw material costs and logistic fees. 

While Japan’s official inflation gauge still looks very subdued compared with accelerating global rates, soy sauce and gasoline are examples of the daily items that are rising in price, as higher costs put pressure on corporate profits and household budgets.

Policies to prevent the surge in fuel prices hurting businesses and households will be included in the economic stimulus package to be unveiled next week, top government spokesman Hirokazu Matsuno said Friday, after cabinet ministers discussed the matter earlier in the day.

A key measure of costs for Japanese companies jumped to the highest level since January 1981 last month, with oil and coal prices making a big contribution as they shot up 44.5%. 

Those rising costs are channeling increasing inflationary pressure into the economy. Consumer prices excluding fresh food turned positive for the first time in 18 months in September. While the price gauge edged up a mere 0.1%, the inflation rate was closer to 1.4% if the impact of lower mobile phone fees is excluded. 

“If the prices of imported goods including oil continue to rise, companies will have to pass that on to the consumer,” said Takuji Aida, Chief Economist, Okasan Securities, suggesting a larger stimulus package may be needed to account for the pressure on family budgets. “To retain strength for a future economic recovery, you need to spend to reduce that burden on households.”

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