(Corrects April 4 story, paragraph 2 to reflect that prices
excluded sales-tax effect. Changes date in dateline.)
TOKYO, April 5 Japanese supermarkets raised
prices on top of a new sales tax this week, data showed, in the
first sign that retailers feel they have the pricing power to
withstand the levy.
Prices at 300 supermarkets nationwide were up 0.9 percent
from year-earlier levels excluding the tax-hike effect on
Tuesday, the day the tax hike took effect, and up 1.5 percent on
Wednesday, according to the UTokyo Daily Price Index, a gauge
maintained by University of Tokyo Professor Tsutomu Watanabe.
On Monday, the day before the sales tax rate rose to 8
percent from 5 percent, supermarket prices were down 1.0 percent
on year, the index showed on Friday.
The rise over the first two days shows that the tax increase
"is steadily being passed along" to consumers, Watanabe told
The index, based on point-of-sales data for as many as
200,000 food items and daily necessities, offers the first broad
indication of how businesses are reacting to the tax hike amid
concerns that it could derail the recovery in the world's
Prime Minister Shinzo Abe raised the tax for the first time
since 1997 in a bid to curb Japan's runaway public debt, which
at more than twice the nation's annual GDP is the biggest in the
industrial world. The increase comes, however, just as the
economy has been slowing.
Abe has been struggling to shake consumers and companies out
of a deflationary mindset in an attempt to decisively pull Japan
out of 15 years of falling prices and tepid growth. The Bank of
Japan last year unleashed unprecedented monetary easing aimed at
generating 2 percent inflation over two years.
(Reporting by Yoshifumi Takemoto; Writing by William Mallard;
Editing by Edmund Klamann)