Two major Japanese retailers might decide to leave product prices unchanged after the consumption tax is raised to 8 percent next April.
"It is our duty to offer an item, say currently priced at JPY98 (USD1), at the same price even after the tax rate rises to 8 percent," Shohei Murai, president of supermarket chain Daiei Inc., said at a news conference on Thursday in Tokyo. "We will do all we can not to raise prices," Murai said.
Prime Minister Shinzo Abe went ahead Tuesday with a much debated sales tax hike needed to offset Japan's soaring public debt, gambling that the country's economic recovery is strong enough to absorb the shock.
Japan's core consumer prices, which exclude volatile food prices, rose 0.8 percent in August from a year earlier, recording their biggest annual rise in almost five years.
The rise in the core consumer price index (CPI) marked the third straight month of increases and was above analyst expectations in a Reuters poll for a 0.7 percent rise.
It is the latest sign that aggressive monetary easing from the Bank of Japan this year is helping to push Japan out of the deflation that has hampered the economy for almost two decades.
Prime Minister Shinzo Abe has decided to raise Japan's sales tax next year but plans to launch a USD50 billion stimulus package to avoid hurting the nation's budding economic recovery, reports said Thursday.
Japan's economic recovery gained momentum in July, as manufacturing accelerated and consumer prices rose for a second straight month, despite weaker household spending and retail sales.
The data released on Friday showed the consumer price index rose 0.7 percent in July from a year earlier, for the second straight month of gains.That suggests efforts to break free of years of demand-dampening deflation are progressing. The CPI rose 0.2 percent in June.
However, the core index, which excludes food and energy prices, fell 0.1 percent.
Japanese retail sales rose 1.6 percent in June from a year earlier, government data showed on Monday, in a sign that hopes for economic recovery are underpinning consumer spending.
The annual rise compared with a 1.9 percent gain projected by economists in a Reuters poll and followed a 0.8 percent gain in May, data from the Ministry of Economy, Trade and Industry showed.
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Consumer confidence in Japan rose to its highest level in over seven years during the second quarter, a survey by market research firm Nielsen showed on Tuesday, as the country undergoes an economic revival led by Prime Minister Shinzo Abe.
Japan's consumer confidence index rose five points to 78, its highest reading since the first quarter of 2006, according to Nielsen's quarterly survey of consumer confidence and spending intentions.
Japan's core consumer prices for May were unchanged from a year earlier, marking the first time in seven months that prices have stopped falling, while industrial output surged past forecasts, data showed on Friday.
The consumer price index (CPI) for the month came in flat, following a 0.4 percent year on year decline in April.
Retail sales rose 0.8 percent in May from the year before, compared to a revised 0.2 percent decline in April.
Consumer confidence across Asia-Pacific has risen amid stable economic growth in Asia-Pacific, with the emerging markets of Myanmar, India, Indonesia and the Philippines leading the region, according to the latest MasterCard Index of Consumer Confidence.
However, Japan recorded the most substantial improvement in consumer confidence, surging 37.0 index points from the previous survey to 60.7 index points, the highest it has been since the second half of 2005 when the index reached 63.0 index points.