Price rises are hitting both consumers and enterprises. Among consumer goods, rises in the prices of food and energy, closely tied to people's daily lives, are conspicuous, and companies hit by higher raw materials costs hesitate to raise wages. These factors tend to depress consumer demand, thus damping the nation's economic expansion. Higher costs for imported resources are fueling the rise in prices. The government needs to act with greater urgency and work together with other nations, especially to counter moves in some countries to restrict food exports.
The cost of Australian coal to be bought by major Japanese steelmakers in fiscal 2008 has tripled from the fiscal 2007 level. Sixty percent of metallurgical coal used in Japan comes from Australia. Iron ore prices will also go up by 65 percent.
In March, nationwide consumer prices registered a 1.2 percent increase from a year before. Except for one period when a rise in the consumption tax rate pushed up prices, the price increases in March were the highest since August 1993. Petroleum products saw an 18.2 percent price increase; noodles, including spaghetti and instant ramen, a 4 percent increase; confectionaries, a 1.7 percent increase; and restaurant meals, a 1.1 percent increase.