Inflation masked as deflation in Japan

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In Tokyo it is hard not feeling the sting of a 710-yen flag fall when hailing a cab. On the upside your fare lasts 2km assuming you don’t get buried in a traffic jam. Now the flag fall is dropping to 410-yen which looks like a bargain until you notice you only get 1.052km included in the fare before the meter kicks in.

After the first 1.052 km, passengers will be charged ¥80 for every 237 meters, a harsher per-meter rate than the previous ¥90 per 280 meters. The Transport Ministry assures us passengers traveling up to about 2 km will pay less under the new system, while those making trips over 6.5 km will see higher costs.

I recall such sneaky economics at the A971 bar in Midtown which advertises a 420ml beer for Y600 or a 570ml beer for Y900. As Leo from the FT once wrote in response to the pic I sent him below, “The pricing of the small glass has been set to represent the best deal…because the bar assumes its cash-strapped customers will not order the more expensive one anyway, so at least let the unhappy drinkers feel they have a bargain.”

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