Global cost surge squeezes Japan's salaryman staples

78-year-old cafe owner Shizuo Mori can't remember a time when his coffee supplies cost so much.

For fifty years, Mori has been running Heckeln, an old-school coffee shop in one of Tokyo's business districts, where a cup of coffee costs $3.60.

But he says its wholesale cost has surged by 5% in the last three months alone.

Yet, wages haven't risen in decades in a country that has seen weak growth.

For now, Mori is shouldering the extra cost out of fear of losing his regulars.

"If people get paid a lot they probably wouldn't care about prices surging. But for the average earner, including myself, if the prices continue rising, people who buy coffee three times a week would only buy it twice a week. There will be less customers."

Surging global commodity prices have made it almost impossible for firms in the world's third-largest economy, not to pass on wholesale price hikes.

It's driven the prices of Japan's consumer favorites up, from coffee to beef bowls.

That comes as a rude surprise to households that are struggling to shake off the economic hit brought about by the global health crisis.

"I hope my salary will increase. If it doesn't increase then I'll refrain myself from shopping and will buy less things. I hope prices come down."

Reving stagnant consumer prices has been the main objective of Japan's central bank for years by stoking demand.

Instead, inflation is now being caused by a constrained supply.

Stagnant wages and the country's income inequality have meant that households are only more sensitive to price hikes.

Cafe owner Mori says that while the prices of milk, bread and gas have all surged, it's still bearable and he'll cover the costs.

He also says he has no other choice.

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