On Monday, Japan’s PM Fumio Kishida said that the country will push global oil producers to raise output and take measures to cushion the blow of higher energy prices to the related energy sectors.
Kishida has instructed the Japanese cabinet to take necessary actions flexibly while closely watching the impact oil price moves have on the domestic industry.
For him, the moment of the rising food and duels are not benefitting as Japan is nearing the lower house elections on October 31.
The country’s core consumer inflation maintains its position around zero as companies are concerned about passing on the higher costs to households as consumption is already weak.
Takahide Kiuchi, a chief economist at Nomura Research Institute, estimates the rise in oil costs and the Yen’s drop so far this year would lower Japan’s consumption by 0.85%. “If crude oil prices continue to rise and the yen keeps falling, that would deal a huge blow to consumption and delay Japan’s economic recovery,” he said.
Meanwhile, sources familiar with the Bank of Japan (BOJ) said that the central bank would likely downgrade the forecast for economic growth for the current fiscal year.
