Will oil prices increase inflation in Japan?

The leap in oil prices increases the likelihood of inflation accelerating in Japan, but it’s unlikely to prompt the Bank of Japan to step back from stimulus. That’s because economic growth continues to underwhelm. Oil prices are well beyond levels the BOJ sees as pushing inflation past its latest forecast, according to people familiar.

Will oil price spike Stoke inflation in Asia?

Oil’s relentless surge above $125 a barrel threatens to stoke inflation across Asia, forcing central banks to decide whether to respond to higher prices with tighter policy, or hold off amid the blow to economic growth. As a net importer of energy, Asia is vulnerable to the oil price spike triggered by Russia’s invasion of Ukraine.

Will a surge in oil prices affect Japan's monetary policy?

Still, some economists see the scope to ease monetary policy limited by any escalation in consumer prices due to the surge in oil. The leap in oil prices increases the likelihood of inflation accelerating in Japan, but it’s unlikely to prompt the Bank of Japan to step back from stimulus. That’s because economic growth continues to underwhelm.