Key Facts
• 2014 (previous Year of the Horse): Consumption tax raised from 5% to 8% after 17 years.
• 1989: Introduction of 3% consumption tax caused a shortage of 1-yen coins.
• 2014: 1-yen coin production resumed after 4 years due to demand for change.
• Post-2014 tax hike: Over 33% of consumers increased saving; nearly 80% tightened spending.
• April 2014 sales dropped initially but recovered within one month.
• 2026: Income tax deduction threshold (“income wall”) planned to rise to 1.78 million yen.
• Past 3 years: Average wage revisions increased across all company sizes.
• 2025: Food price hikes reached 26,609 items, 64.6% higher than previous year.
• 2026: Planned price hikes drop sharply to 1,044 items.
• NISA (tax-free small investment system) age limits may be removed; product range expanded.
• Expert forecast: Inflation will continue moderately but stabilize compared to recent years.
• Companies likely to prioritize wages and capital investment over price cuts.
• Real wage growth expected in late 2026.
• Attention needed on rising interest rates.
• Consumers advised to utilize tax systems like NISA and mortgage deductions to increase disposable income.
Summary
The Year of the Horse in 2026 may signal financial changes reminiscent of 2014, when consumption tax rose from 5% to 8%, causing widespread consumer caution and logistical challenges like 1-yen coin shortages. In 2026, the income tax deduction threshold is set to increase, potentially boosting take-home pay. Wage growth trends over the past three years support this optimistic outlook. Although inflation will persist moderately, price increases for food and other goods are expected to slow significantly compared to 2025. Revisions to the NISA investment scheme could further aid personal asset growth. Experts predict companies will focus on securing labor and investing in equipment rather than lowering prices, with real wage gains anticipated in the latter half of the year. However, rising interest rates remain a concern. Consumers are encouraged to leverage tax benefits and adjust spending habits to maximize disposable income. Overall, 2026 holds potential for increased financial stability and gradual income improvement amid a still cautious economic environment.
