The key to understanding the Japanese market… In Anatomy of the Japanese Household Account Book ③, let us continue to assume메이저놀이터 that prices rise by 2% every year as expected by the Japanese government. After 10 years, the living expenses needed for a retired elderly couple to live at the bare minimum will rise to 283,000 yen (approximately 2.56 million won) per month, and the living expenses needed to live comfortably will rise to 462,000 yen per month.
This is an increase of 51,000 yen and 83,000 yen respectively compared to now. As prices rise, I am not confident that I will be able to save 1 million yen every year.Let’s take a look again at the household balance of the average Japanese family of four, which we looked at earlier. The recent inflation rate of 3.6% (food costs increased by 5.9%, electricity, gas and water rates increased by 15.2%) and the income growth rate of 2.2% were applied. As a result, annual expenditures increased by 3.6% to 6,128,000 yen, while income increased by only 2.2% to 7,044,000 yen, reducing the amount of spare money that could be saved to 916,000 yen.Moreover, as prices rise, the value of cash falls. The cash value, currently 10 million yen, will decrease to 8.2 million yen after 10 years and 6.72 million yen after 20 years. As seen in the household balance sheet, utility bills such as food and electricity and water bills account for a large portion of retirement living funds. Both are items greatly affected by price increases.
If a natural disaster such as an earthquake, tsunami, or heavy rain occurs, or if there are unplanned expenses such as a serious illness, life 20 to 30 years from now can become hell. In a survey conducted by foreign life insurance company PGF
Life in 2019 on 2,000 people aged 60, the average savings (combined for couples) was 29.56 million yen. However, two-thirds of all respondents had savings of less than 20 million yen. 24.7% of respondents said their savings were less than 1 million yen.Understanding this situation, it seems natural that Japanese people would be sensitive to a 10 yen difference at the supermarket. This is why in Japan, just by raising the price of mayonnaise by 30 yen, market share suddenly drops by 10%. This is not because the Japanese are salty, but rather an extremely rational economic activity to prepare for the future.
The only way to relieve Japanese people’s anxiety is to increase their income. This is why Prime Minister Fumio Kishida’s cabinet is obsessed with raising wages. On the 4th, the Ministry of Health, Labor and Welfare announced that the wage increase rate of 364 major companies with more than 1,000 workers this year was 3.6%, the highest in 30 years. The wage increase rate for the 136 largest companies is 3.99%.
However, real wages reflecting the inflation rate in August were -2.5 %, remaining negative for 17 consecutive months. Many analyzes say that this year’s wage increase rate, which is the highest in 30 years, is the result of companies responding to global inflation and the government’s arm-twisting.
Will we be able to continue the wage increase rate of more than 3% next year and turn real wages positive? Whether Japan can escape chronic deflation and calm Japanese people’s anxiety about the future depends on this. This is why the Bank of Japan and experts pay attention to next year’s wage increase rate as soon as the results of this year’s wage negotiations are announced.