Higher inflation expectations and price tolerance are starting to take root in Japan, a development that supports the central bank’s moves to normalize policy and raise interest rates further.
A recent survey by Tsutomu Watanabe, a leading inflation expert in the country, shows that Japanese consumers’ tolerance for price changes is holding up and exceeding levels among consumers in some other major economies. The survey showed for the third year in a row that more than half of respondents would continue to buy a product from the same supermarket, even if prices rose by 10%.
The result is another indication that Japanese consumers are accepting inflation for the first time in decades and are losing their reputation as one of the most price-sensitive consumers in the world. The research, which has been cited in the past by the Bank of Japan, shows that the Japanese are more accepting of price increases than their peers in Britain, Germany and Canada.
