Rising Temperatures, Rising Costs

Welcome to the first edition of Rough Edges Japan! It's been an eventful past few days, and we'll take a look at some recent events, consumer economics and demographic shifts.

In a recent election that might mark a strategic turn for the ruling LDP and also included the emerging far-right populist party who have some controversial ideas borrowed from another recent far-right populist movement. July was the hottest recorded in Japan, taking the crown from...last year, which itself beat out last-last year. The massive Kamchatka earthquake came and brought some tsunami warnings, and may have awoken the 600-year dormant Krasheninnikov volcano - thankfully, this isn't a podcast!

Prices and Wages

This month, we will see over a thousand food and drinks rise in price, which will bring the total to over 20 thousand items for the year. In combination with the tariffs from the US and the likelihood of a rate increase in the near future, consumers may have rough seas ahead as essentials become more expensive and borrowing money becomes less attractive for their own use (mortgages, car loans, business loans) and for construction companies who build affordable housing.

Not all news for the typical consumer is bad, though. Government employees could be seeing salary and bonus increases soon. There's a proposal in the works to raise the minimum wage by about 5% (63 yen) - not much, but it's something. Major companies have done a decent job of raising wages, but a white paper submitted to the Cabinet last week suggested the rising tide needs to be bigger for the metaphorical boats of Japan.

Still, for a lot of people, rising prices are deeply painful, and macroeconomic facts such as Japan being an affordable country are small comfort to struggling households when even rice is hardly a cheap staple anymore.

Population Dynamics Doing Dynamic Things

By the numbers, Japan's foreign residents are expected to exceed 10% of the population by 2040. Prefecture governors are banding together to promote multiculturalism and inclusion across the country. Global Trust Networks, a guarantor service that happily serves foreign residents in the difficult rental ecosystem, continues to keep an open mind and looks for more opportunity to support foreign residents and local governments alike.