7 ms·

A theory I heard is that Japan has a fixed idea of what things should cost, and if anything ever costs more or less, there needs to be a good reason. Using pric

A theory I heard is that Japan has a fixed idea of what things should cost, and if anything ever costs more or less, there needs to be a good reason. Using price as a market signal is culturally unacceptable. Conveyer belt sushi still costs ¥100 for the cheap stuff, and ¥200 for the higher-end shops. Even things that are overpriced have remained overpriced for the last 30 years. Video games have always cost ¥7800 yen, about twice as much as in the US, and music CDs cost ¥3000, again about twice as much. And don't even get started on what it costs to own a copy of a TV show. Once the culture has decided what a price should be, it can never go up or down. If you change the MSRP, it's a sign that you're trying to cheat people. Either the customer, if you're raising prices, or the business community, if you try to lower them and undercut competitors.

dustintrex 5y ago
It's a cute theory, but Japan had serious inflation after the war, averaging 5%/year for decades and peaking at 25% during the 1970s oil crisis. The current zero to negative inflation era only began after the Bubble burst in the 1990s.
- CyanBird 5y ago
  Yeah, but that has got to do with how the macroeconomic system works after the bubble and how the central bank was changed from working under the ministry of finance and into being an independent body The book prices of Yen goes into great detail of the Japanese change from being a behemoth of industrial production pre-bubble and into its own current system today
- secondaryacct 5y ago
  Yeah but it's somewhat right what op said: because of that crisis, all they are willing to do now is save. Save save save. They'll spend nothing at all, too hungover of the bubble burst. You can double the supply, they ll double their stash so you ll have very low circulation. And they wont borrow, too afraid of defaulting, so banks dont know what to do with all this stash. So in effect they burn the money supply, and any attempt at changing this must first tap deep into this fundamental fear.
phendrenad2 5y ago
We have that in the US too. Video games have been exactly $60 for 3 decades now. Of course the publishers have taken to supplementing that with micro-transactions and pushy sales tactics to get the "bonus edition" for $100. I wonder what the sushi places are doing to make up the difference?
- thrdbndndn 5y ago
  Shrinkflation probably.
- prepend 5y ago
  Video games were $50 in the 90s. They upped to $60 in the 2000s with the next gen xbox and ps3.
- me_me_me 5y ago
  The AAA game publisher are not supplementing anything with micro-transactions. This is more profitable/predatory practice that earns them more money per title then they made selling that $60 game - all sport games are prime examples.
thrdbndndn 5y ago
On macroscale, Japan do have some categories of items "overpriced" compared to the counterparts to the US, but same can be said for any country. And no, they're not "fixed". I've noticed that music CD's price has been inflating for quite a lot, and I only started purchasing them for less than 10 years.
fomine3 5y ago
Some prices are hard to change. 100yen shops must set price 100yen + tax for most products. Arcade games can't set 110yen but can set 100 or 200 yen. I admit Japanese tend to think price won't up without reason for recent two decades. It is called "deflation mindset". So some manufacturers do shrinkflation.
- glandium 5y ago
  Note that 100yen shops used to be 100yen tax included before the consumption tax went from 3 to 5%. So overnight, prices there went from 100yen to 105yen.
  - quartesixte 5y ago
    Which is a source of frustration to no end given how annoying that extra 5 yen can be. You will always at minimum need to pay with 2 coins. Not to mention awkwardly given back any multiple of 5 back if you pay in any multiple of 10. God help your coin purse (or pockets) if you end up with an unholy mix of 1, 5 and 10 yen coins.
    - glandium 5y ago
      It's 110 yens, now ;) (consumption tax went up to 8% a few years ago and to 10% more recently)
Gatsky 5y ago
An example: I heard a story about a Japanese popsicle company which had to increae the price of their product due to the cost of wood used for the stick. They created an ad on national TV explaining the change and apologising profusely: https://qz.com/656080/a-japanese-ice-cream-maker-deeply-apologizes-for-raising-prices-by-9-cents/ https://qz.com/656080/a-japanese-ice-cream-maker-deeply-apol...
c_o_n_v_e_x 5y ago
In a slight parallel, there's a concept of "spoiling the market" in Singapore. There's cultural pressure to not drop rent or not increase wages by "too much" as that would "spoil the market." Anecdotally, I've seen landlords here in SG keep properties vacant for long periods of time rather than drop the rent.
- avidiax 5y ago
  That sounds quite similar to the U.S. commercial real estate sector, except that (IIUC) the structure of the loans in the U.S. would require a refinance if the nominal monthly return of the underlying property were ever lowered. So properties sit vacant with an ongoing business loss rather than realize a real loss.
missedthecue 5y ago
ok but at some point the japanese businesses who price their products in this manner will start eating losses, because many of the inputs to production are procured off the international markets, who follow more rational pricing mechanisms.
SenHeng 5y ago
Sushi has not been ¥100yen for at least a decade. Maybe the cheap stuff like crab sticks. Here’s the menu and prices of the largest ‘100yen’ sushi chain. https://www.kurasushi.co.jp/menu/?area=area0 https://www.kurasushi.co.jp/menu/?area=area0 Japan has been undergoing shrinkflation for the past decade because manufacturers are afraid to raise prices but have a need to cut costs. New packaging is often introduced, sometimes with a higher price but often a small volume. The British should know how this feels with their toblerones. https://www.theguardian.com/business/2016/nov/08/toblerone-gets-more-gappy-but-its-fans-are-not-happy https://www.theguardian.com/business/2016/nov/08/toblerone-g...
imtringued 5y ago
No, it's quite simple. They are next to China. They have aging demographics, their real estate bubble popped and their "fiscal stimulus" attempts involved increasing consumption taxes... (Abenomics).

dustintrex 5y ago

It's a cute theory, but Japan had serious inflation after the war, averaging 5%/year for decades and peaking at 25% during the 1970s oil crisis. The current zero to negative inflation era only began after the Bubble burst in the 1990s.

CyanBird 5y ago
Yeah, but that has got to do with how the macroeconomic system works after the bubble and how the central bank was changed from working under the ministry of finance and into being an independent body The book prices of Yen goes into great detail of the Japanese change from being a behemoth of industrial production pre-bubble and into its own current system today
secondaryacct 5y ago
Yeah but it's somewhat right what op said: because of that crisis, all they are willing to do now is save. Save save save. They'll spend nothing at all, too hungover of the bubble burst. You can double the supply, they ll double their stash so you ll have very low circulation. And they wont borrow, too afraid of defaulting, so banks dont know what to do with all this stash. So in effect they burn the money supply, and any attempt at changing this must first tap deep into this fundamental fear.

phendrenad2 5y ago

We have that in the US too. Video games have been exactly $60 for 3 decades now. Of course the publishers have taken to supplementing that with micro-transactions and pushy sales tactics to get the "bonus edition" for $100. I wonder what the sushi places are doing to make up the difference?

thrdbndndn 5y ago
Shrinkflation probably.
prepend 5y ago
Video games were $50 in the 90s. They upped to $60 in the 2000s with the next gen xbox and ps3.
me_me_me 5y ago
The AAA game publisher are not supplementing anything with micro-transactions. This is more profitable/predatory practice that earns them more money per title then they made selling that $60 game - all sport games are prime examples.

thrdbndndn 5y ago

On macroscale, Japan do have some categories of items "overpriced" compared to the counterparts to the US, but same can be said for any country. And no, they're not "fixed". I've noticed that music CD's price has been inflating for quite a lot, and I only started purchasing them for less than 10 years.

fomine3 5y ago

Some prices are hard to change. 100yen shops must set price 100yen + tax for most products. Arcade games can't set 110yen but can set 100 or 200 yen. I admit Japanese tend to think price won't up without reason for recent two decades. It is called "deflation mindset". So some manufacturers do shrinkflation.

glandium 5y ago
Note that 100yen shops used to be 100yen tax included before the consumption tax went from 3 to 5%. So overnight, prices there went from 100yen to 105yen.
- quartesixte 5y ago
  Which is a source of frustration to no end given how annoying that extra 5 yen can be. You will always at minimum need to pay with 2 coins. Not to mention awkwardly given back any multiple of 5 back if you pay in any multiple of 10. God help your coin purse (or pockets) if you end up with an unholy mix of 1, 5 and 10 yen coins.
  - glandium 5y ago
    It's 110 yens, now ;) (consumption tax went up to 8% a few years ago and to 10% more recently)

Gatsky 5y ago

An example: I heard a story about a Japanese popsicle company which had to increae the price of their product due to the cost of wood used for the stick. They created an ad on national TV explaining the change and apologising profusely: https://qz.com/656080/a-japanese-ice-cream-maker-deeply-apologizes-for-raising-prices-by-9-cents/ https://qz.com/656080/a-japanese-ice-cream-maker-deeply-apol...

c_o_n_v_e_x 5y ago

In a slight parallel, there's a concept of "spoiling the market" in Singapore. There's cultural pressure to not drop rent or not increase wages by "too much" as that would "spoil the market." Anecdotally, I've seen landlords here in SG keep properties vacant for long periods of time rather than drop the rent.

avidiax 5y ago
That sounds quite similar to the U.S. commercial real estate sector, except that (IIUC) the structure of the loans in the U.S. would require a refinance if the nominal monthly return of the underlying property were ever lowered. So properties sit vacant with an ongoing business loss rather than realize a real loss.

missedthecue 5y ago

ok but at some point the japanese businesses who price their products in this manner will start eating losses, because many of the inputs to production are procured off the international markets, who follow more rational pricing mechanisms.

SenHeng 5y ago

Sushi has not been ¥100yen for at least a decade. Maybe the cheap stuff like crab sticks. Here’s the menu and prices of the largest ‘100yen’ sushi chain. https://www.kurasushi.co.jp/menu/?area=area0 https://www.kurasushi.co.jp/menu/?area=area0 Japan has been undergoing shrinkflation for the past decade because manufacturers are afraid to raise prices but have a need to cut costs. New packaging is often introduced, sometimes with a higher price but often a small volume. The British should know how this feels with their toblerones. https://www.theguardian.com/business/2016/nov/08/toblerone-gets-more-gappy-but-its-fans-are-not-happy https://www.theguardian.com/business/2016/nov/08/toblerone-g...

imtringued 5y ago

No, it's quite simple. They are next to China. They have aging demographics, their real estate bubble popped and their "fiscal stimulus" attempts involved increasing consumption taxes... (Abenomics).