Nearly quarter of major Japanese firms to raise prices in 2023

Nearly a quarter of major companies in Japan are considering raising the prices of their products next year or later due to increasing material costs and a weaker yen, a Kyodo News survey showed on November 27.

Of the 80 respondents — companies that included Toyota, Nintendo and Shiseido — 23 per cent said they are mulling price hikes on consumer products, while 49 per cent said they were undecided, The Japan Times reports.

Among the answers for why they are thinking of price hikes, many cited the rising costs of materials, followed by an increase in shipping costs and the yen’s depreciation.

The survey — conducted from Nov. 7 to 21 across 107 companies,with 80 firms responding — also found that 15 per cent did not reveal their decision on whether a price increase is in the works.

The survey results were released as consumer prices in November in Tokyo gained 3.6 per cent from a year earlier, marking the steepest rise since 1982 amid higher energy and food prices that increasingly squeeze household budgets, according to government data released Friday.

The inflation data for Tokyo is seen as an indication of what to expect nationwide.

In the survey, only Torikizoku Holdings, an operator of a chain of izakaya Japanese-style pubs, said that it is not considering raising prices.

Asked how many price hikes they carried out this year, 13 per cent said they have never done so, while 29 per cent answered once and 14 per cent said twice.

Those that raised prices three or four times constituted 3 per cent, while those that did so five or more times comprised 4 per cent.

Asked to what extent they could absorb costs based on a price increase, most of the companies said they were able to retrieve less than 70 per cent of the costs.

Yorifusa Wakabayashi, the president of Daio Paper, said that a decline in sales volume is “inevitable” and that he had ordered the sales team to secure profit.

Daio Paper will increase its consumer products, including facial tissue, toilet paper and kitchen paper, by more than 20 per cent starting Jan. 21.

Meanwhile, only 6 per cent said they will raise employee wages in response to a question on whether a pay raise is planned for next year amid higher commodity prices.

Companies that said they will consider doing so stood at 18 per cent, while 3 per cent said they will not, according to the survey.

The survey also found that 30 per cent are uncertain about a pay raise in 2023, and 33 per cent did not disclose their decision.