At least prior to the pandemic, that price growth can be almost entirely attributed to the Abenomics policy of a rising sales tax (which went from 5 to 8 percent in 2014, and then to 10% in 2019). This was deliberately implemented to cause consumer price inflation and accelerate consumption (due to the expectation that prices would rise in the future). Consumption tax is included in the CPI. If you look at base prices before sales tax, they're almost perfectly flat between 2010 and 2020. Anyway, the CPI is flat enough over the decades that the Japanese yen has largely held its value, at least on domestic products, and this supports the thesis that Japanese citizens haven't felt it necessary to accumulate real estate to protect their wealth.
As an aside, the fact that the purchasing power of the US dollar has fallen substantially over that time, while the exchange rate of JPY to USD has risen, is something quite fascinating to me. I don't see it discussed nearly enough.
> CPI is flat enough over the decades that the Japanese yen has largely held its value, at least on domestic products
Not contesting—this makes sense—but do you have a source?
> the fact that the purchasing power of the US dollar has fallen substantially over that time, while the exchange rate of JPY to USD has risen, is something quite fascinating to me. I don't see it discussed nearly enough
It’s the widowmaker carry trade. FX traders and macro funds love talking about it.
It comes down to the difference in international versus domestic demand for dollars per se, not dollars in any form (e.g. Treasuries).
The widowmaker carry trade reflects the currency side, but what fascinates me is that for example, a tube of toothpaste (random example) has gone to $3~$4 in the US, while it's still $1 in Japan. Go to a dollar store in Japan (except for Daiso) and it's full of cheap, high-quality goods that are made-in-Japan, from plastic organizers and pencil cases to measuring tapes and bicycle stickers. Those are now cheaper than similar made-in-China products being sold in the USA. The cost of container shipping is still quite low. So you'd think Americans would be hungrily importing Japanese goods until the arbitrage opportunity disappeared, but they're just... not. And perhaps that reflects that the most significant and long-lasting component of inflation in the US is shelter, which can't be imported.
As an aside, the fact that the purchasing power of the US dollar has fallen substantially over that time, while the exchange rate of JPY to USD has risen, is something quite fascinating to me. I don't see it discussed nearly enough.