Cost of living in Japan - statistics & facts
Rice prices have been dominating the headlines in Japan. The price of this Japanese staple food has been skyrocketing since 2024, prompting the government to release some of its emergency rice stockpile to alleviate the situation. But the staggering price increase of rice is just one example of a general trend of higher cost of living faced by Japanese households. Inflation hit Japan in 2022, ending more than three decades of struggles with deflation and putting consumers in a very new environment. With households facing rising prices for daily necessities and cutting back on expenses, the situation was a central topic ahead of the 2025 Upper House election.
Rice, an integral part of Japanese culture and cuisine, is especially representative of the struggles felt by consumers. Due to higher demand and a supply shortage caused by extreme weather conditions in 2023, rice prices more than doubled within a year. Earlier in 2024, the “cabbage shock” made headlines, with prices for cabbage increasing by around 26 percent due to poor harvest. Food expenditure has been taking up a growing share in households’ consumption spending, making them even more vulnerable to price increases and forcing some to adjust their diet and choose cheaper alternatives to expensive food items. On average, consumers spent around 28 percent of their total monthly expenditure on food in 2024.
Addressing the higher cost of living faced by households, opposition parties called for a cut in consumption tax on food, putting the ruling coalition under political pressure ahead of the Upper House elections in July 2025.
As inflation was projected to persist in the coming years, consumers are likely to experience a further increase in cost of living in 2025.
Rising food prices
Japanese consumers were confronted with heavy price increases for basic food items in 2024. Food was a key driver for the increase in Japan’s Consumer Price Index (CPI). Fresh food prices grew by seven percent year on year, with fresh fruits, fresh vegetables, and cereals, including rice, bread, and noodles, being among the major contributors to Japan’s inflation.Rice, an integral part of Japanese culture and cuisine, is especially representative of the struggles felt by consumers. Due to higher demand and a supply shortage caused by extreme weather conditions in 2023, rice prices more than doubled within a year. Earlier in 2024, the “cabbage shock” made headlines, with prices for cabbage increasing by around 26 percent due to poor harvest. Food expenditure has been taking up a growing share in households’ consumption spending, making them even more vulnerable to price increases and forcing some to adjust their diet and choose cheaper alternatives to expensive food items. On average, consumers spent around 28 percent of their total monthly expenditure on food in 2024.
How are households affected by inflation?
Food was not the only item causing a financial burden to consumers. A general price increase in basic expenditures, such as electricity prices, put an additional strain on household budgets and prompted consumers to cut back on their expenditures in 2024 as wage development could not keep up with consumer inflation. Consumption spending reached a decade high, but when adjusted for the effect of price changes, households actually reduced their expenditure. Households cut back on basic utilities, food, and housing while spending more money on education, medical care, and clothing and footwear.Addressing the higher cost of living faced by households, opposition parties called for a cut in consumption tax on food, putting the ruling coalition under political pressure ahead of the Upper House elections in July 2025.
As inflation was projected to persist in the coming years, consumers are likely to experience a further increase in cost of living in 2025.
