Weak Yen Hits Japan’s Dinner Table as Food Self-Sufficiency Rate Falls to Record-Low 37%

Engel coefficient highest in 44 years

Import-dependent structure fuels price instability

Japan’s prolonged food inflation is being amplified by the country’s low food self-sufficiency rate as the yen weakens, a recent analysis showed. The finding suggests short-term measures such as cash handouts or tax cuts have limits, and that Japan needs to overhaul its import-dependent supply structure as part of a broader food-security strategy.

According to Japan’s Ministry of Internal Affairs and Communications on October 4, the country’s Engel coefficient reached 28.6% in 2025, the highest level since 1981. The Engel coefficient measures the share of food spending in total consumer expenditures.

A broadening move by companies to pass higher raw-material costs on to consumers has been a major driver of rising food bills. Import costs for raw materials and energy have also remained high. As the yen weakens, prices of imported food and ingredients rise further, adding to domestic food inflation.

In a recent analysis, Japan’s Cabinet Office said broad-based price increases have left consumers with little choice but to accept a certain level of food price hikes. Immediate inflation measures still matter, but Japan also needs to change a food supply structure that is prone to sharp price increases driven by external factors, a Cabinet Office official added.

Japan’s low food self-sufficiency rate has also emerged as a problem. According to the Ministry of Agriculture, Forestry and Fisheries, Japan’s food self-sufficiency rate for fiscal 2025 stood at 37% on a calorie basis, the lowest on record.

Reliance on imports is rising not only for finished food products but also for goods used in food production. Cabinet Office analysis showed the share of imported goods used directly in food manufacturing rose to 14.2% in 2020 from 10.0% in 2000.

Exchange-rate swings also feed into food prices with a lag. The Cabinet Office said changes in the yen tend to affect Japan’s consumer price index for food excluding fresh food and rice about a year later.

Improving the food self-sufficiency rate is important not only for strengthening food security but also for cushioning the impact of exchange-rate volatility on domestic prices, a Cabinet Office official said.

Japan’s government plans to cut the consumption tax rate on food to 1% from the current 8% for two years starting in April 2027 in response to rising grocery prices. While the tax cut may ease the burden on households, some within the government say it is not a fundamental solution to food inflation.

As geopolitical instability and yen weakness look set to persist, calls are growing for Japan to shift the focus of its food policy from simple price measures to food security. Analysts say that unless the country builds a food supply chain less vulnerable to overseas prices and currency swings, Japanese households will face repeated pressure on grocery bills whenever the yen declines.

Choi Man-su, Tokyo correspondent, Korea Economic Daily bebop@hankyung.com