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Beef dish serves as economic gauge

By Reuters in Tokyo | China Daily | Updated: 2014-12-10 08:02

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 because of higher import costs.

The move marks a much-needed win for the central bank, which is struggling to achieve its 2 percent 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 27 percent 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 favorite of Japan's penny-pinching corporate employees and thus an informal measure of consumer prices.

The increase marks the first pure price hike for the dish since March 1990, excluding an adjustment 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 percent since then, likely putting the inflation target further out of reach.

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