Japan in the rice crisis: Exploding prices and state reserves in action!

Japan in the rice crisis: Exploding prices and state reserves in action!

Japan faces significant economic and social challenges. In May 2025, the country lost its status as the largest net creditor state to Germany. For almost 35 years, Japan topped this ranking, but now Japan's net foreign assets stand at about 533.05 trillion yen (about 3.3 trillion euros), an increase of 12.9% compared to the previous year. Germany, on the other hand, has a net foreign assets of 569.65 trillion yen (approx. 3.56 trillion euros) and has thus overtaken Japan sumikai.com reported.

Another key issue in Japan is the ongoing price increase. Consumer prices in Tokyo's 23 wards rose 3.6% year-on-year in May 2025, the highest increase in over two years. This increase in the cost of living is hitting many Japanese households hard.

Rice crisis and government measures

The developments in the rice sector are particularly dramatic. Due to poor harvests and explosive prices, Tokyo had to resort to government rice supplies for the first time. Rice prices have exceeded 1,000 yen (approx. 6.30 euros) per kilo - an increase of up to 80% compared to the previous year. Agriculture Minister Taku Eto announced plans to release 210,000 tonnes of rice from state reserves to stabilize prices. These supplies are usually earmarked for poor harvests or natural disasters, underscoring the urgency of the current situation, according to a report by tagesschau.de is explained.

The poor harvest in summer 2023 and the average harvest in 2024 have aggravated the situation. Climate change has a lasting impact on rice cultivation. Critics point out that government subsidies for other crops such as fodder rice are not enough to support rice growers. The area under rice cultivation is also limited by the state, and although the official policy to reduce the number of rice cultivation regions ended in 2018, farmers lack the incentives to increase cultivation.

Social developments and challenges

In parallel with economic developments, the social structure in Japan is also showing signs of change. The birth rate continues to fall: only 162,955 children were born in the first quarter of 2025, a decline of 4.6% compared to the previous year. These figures are in the context of a changing society in which long-established neighborhood associations are losing importance and are increasingly dissolving.

At the end of 2024, around 3.77 million foreigners lived in Japan, an increase of almost 360,000 compared to the previous year. The Japanese government is also planning to revise rice cultivation policies and has introduced measures in the education sector to accommodate Harvard international students affected by an entry ban.

It remains to be seen how the current rice crisis, the shrinking supply of supplies and rising prices will affect Japanese society in the long term. In the current situation, the challenges are diverse and require decisive action from the Japanese government.