Japan's Real Income Declines... "Christmas Cake" Too Expensive to Buy

December Cake Prices Up 5% Year-on-Year
Food Ingredient Prices Surge Due to Ukraine War Impact
Price Increase Expected for 4,000 Food Items

[Asia Economy Reporter Lee Ji-eun] "Christmas cakes are too expensive to buy."

As cake prices rise due to soaring food ingredient costs caused by the Russia-Ukraine war and the depreciation of the yen, this is a complaint born from tight budgets. Christmas cakes are considered a barometer reflecting Japan's inflation trends because they are priced higher than the cost of ingredients, and there are forecasts that this year's Christmas in Japan will be colder than usual.

On the 7th (local time), according to Japanese credit information company Teikoku Databank, the average price of cakes in Japan in December rose about 5% compared to the same period last year, reaching 4,040 yen (approximately 38,724 won).

The impact of the Russia-Ukraine war was significant. According to Teikoku Databank, more than 20,000 food prices in Japan have increased this year. Among them, the prices of flour and milk rose by 52% and 11% respectively compared to the previous year. The price of sugar used in cakes increased by 8%. Bloomberg analyzed, "This reflects the fact that Japan's consumer price index (CPI) in October recorded the highest increase in 40 years." Prices of food packaging materials are also soaring. Teikoku Databank stated, "The confectionery industry is struggling as packaging boxes, gas, and electricity bills have been raised one after another," and "Inflation is expected to continue next year, with prices of more than 4,000 food items predicted to rise."

On the other hand, real wages have declined for seven consecutive months. As nominal wage growth failed to keep pace with rapid inflation, Japan's real wages in October fell by 2.6% compared to the same period last year. This is the largest decline since 2015. Some even express concerns that personal consumption may shrink.

Bloomberg emphasized, "Japanese Prime Minister Fumio Kishida is preparing various economic stimulus measures, including reducing energy costs, to mitigate price increases," but added, "It cannot be expected that these policies will have a significant impact on lowering the perceived inflation by Christmas."

This content was produced with the assistance of AI translation services.