TOKYO - Japanese fast-food company Yoshinoya Holdings Co said on Tuesday it would raise the price of its signature beef bowl dish - long a symbol of the deflationary economy - for the first time in 24 years due to higher import costs.
The move marks a much-needed win for the central bank, which is struggling to achieve its 2 per cent inflation target after two decades of falling prices. Reversing the deflation trend and reviving consumption is key to Prime Minister Shinzo Abe's strategy to jump-start the world's third-biggest economy.
Yoshinoya, operator of the 115-year-old beef bowl chain, said it would raise the price of its regular-size "gyuudon" dish by 27 per cent to 380 yen ($3) on Dec. 17, citing a spike in US beef prices and the yen's sharp depreciation against the dollar.
The "gyuudon" is a bowl of rice topped with sauteed beef and onions that is a favourite of Japan's penny pinching corporate employees, and thus an informal measure of consumer prices.
That would mark the first pure price hike for the dish since March 1990, excluding an adjustment to prices in April to reflect an increase in the national sales tax, a company spokesman said.
The price rise will be welcome news for the Bank of Japan, which eased monetary policy further in late October to counter the deflationary effect of slumping oil prices and weak domestic demand.
Oil prices have fallen 15 per cent since then, likely putting the inflation target further out of reach.
Some central bankers now fear core consumer inflation will slow to about 0.5 per cent by the middle of next year, down from May's peak of 1.4 per cent.