Investors needing a metaphor for the Japanese stock market since 2012 could do worse than the gyudon beef bowl, a cheap, unadventurous base of stodge cherished for the exceptionally thin slivers of meat on top. But over the past five years, as the Bank of Japan has imposed radical monetary easing and the Abenomics revival programme has battled for legacy, the gyudon has become a market indicator in its own right. The dish and, in particular, the shares of the Yoshinoya chain that specialises in serving it for 380 yen a bowl have been sensitive barometers for everything from geopolitics to the great meat versus fish battle currently dictating profit flow in Japan's huge listed restaurant sector.
In late 2014, when it still seemed half realistic that the BoJ might achieve its 2% inflation target, Yoshinoya became a star pupil by hiking the prices of its signature gyudon for the first time in almost 25 years. A year later, as participants drafted the massive Trans-Pacific free trade deal, investors quickly identified Yoshinoya, which imports 11,000 tonnes of US beef a year, as a clear beneficiary. As labour shortages have reached historic levels of severity and economists have waited impatiently for that to translate into significant wage inflation and consumption, the hiring practises and clientele of Yoshinoya have demanded scrutiny.
In close line with the benchmark [? topic index ?] since Shinzo Abe became prime minister, Yoshinoya stock has climbed 76%, which is why, when Yoshinoya's stock wobbled suddenly off a 10 year high last week, a move echoed by other companies in the gyudon game, some wondered whether the turn portended dark things for the market in general. The trigger for the dip was confirmation that Japan will, from August 1, hike tariffs on US frozen beef imports from 38.5% to 50%, an automated mechanism that serves to highlight the opportunities Japan has missed through the collapse of the TPP.
But worse, in many ways, was the comment of Yoshinoya spokesman who said that the conditions around consumption meant that the company was unlikely to pass prices on to customers-- a bleak conclusion after five years of central bank government efforts to encourage precisely that. The beef bowl has spoken, and Abenomics has lost its flavour.