A sign from the Communist party expressing the notion that the consumption tax (sales tax) should not be increased.
Last year, I kept reading news about how prices would be going up in Japan "next year", and just 16 days into the new year, they are indeed showing serious signs of doing so. Today when I was at the local drug store buying the same cheapest possible brand of toilet paper that I've been purchasing for two years now, I saw a pretty sizable boost. The price was 198 yen ($1.85) per 12 rolls for the two years I had been purchasing it, but then rose to ¥228 ($2.14) in the last few months of 2007. Now, it is at ¥248 ($2.32). Given the long-term price stability of this particular product, I think it's a good example of the boosts we're going to see and I don't think this was a one-time increase. I think this is where it'll stay (unless it goes up further).
Of course, this isn't the only thing I've noticed which has gone up in price. Butter used to be occasionally on sale for 248 yen ($2.32) per 200 grams (that's about 2 sticks in the U.S. or one cup) and it has not dropped lower than ¥288 ($2.70) for the last 4 months or so and is more frequently over ¥300 ($2.80). Additionally, milk has gone up an average of 10 yen per liter.
If these weren't basic items (and in some cases necessities), price increases wouldn't be a big deal, but the prices of daily goods is clearly headed north while salaries aren't rising much (if at all) for most folks. They certainly aren't going up for my husband or I. I'm guessing that this is just the tip of the iceberg in terms of various food and sundry necessities going up in price, but that isn't all that we have to consider in regards to increases in the cost of living in the near future.
There has been much talk as of late about raising the consumption tax in Japan from 5% to between 8-15% in order to collect more money for the Japanese pension system. Since the number of young, tax-paying folks is constantly (though slowly) falling and the percentage of people collecting pensions is ballooning, there aren't enough people paying into the system to keep it alive from taxes alone.
Back home in Pennsylvania, sales tax didn't apply to food so that less of a burden was placed on people when it came to buying what they absolutely needed (though it did apply to paper goods like toilet paper so, go figure). In Japan, consumption tax applies to all purchases so it looks like we're headed into 2008 not only paying more for goods we can't avoid buying and facing the prospect of paying a higher tax on those higher prices.
Personally, I think that this is going to reduce purchasing overall and cause the Japanese to re-think or avoid "luxury" goods like new cell phones, televisions, cars, etc. and have an overall negative impact on the economy. I'm guessing the government is hoping people will choose to freeze up less of their yen in savings accounts and maintain their current standard of living, but given that most Japanese people are fiscally conservative, I'd wager on them scaling back and maintaining their level of savings at the cost of their lifestyle.