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Both were record highs for Japan. The soaring price of oil
affects a wide range of sectors, including plastic goods and
shipping costs.
Resource-poor Japan imports virtually all its oil and has relied
on access to the Strait of Hormuz in the Middle East for its oil
shipments. That’s now basically blocked, and Japan has had to
pay more to get shipments from other routes.
Brent crude, the international standard, has soared from $70 a
barrel in February to around $110 a barrel. Analysts say prices
are unlikely to ease soon.
For the month of September, Japan’s trade deficit totaled 536.6
billion yen, marking the fifth month of deficits, down from 1.1
trillion yen in August.
Japan’s September imports grew 18.9% from the previous year,
while exports rose 16.7%.
One sore point is the weakening yen, which drives up the cost of
imports. The U.S. dollar is lately trading at 150-yen levels.
The central bank, which kept borrowing costs at below or near
zero for years to help keep a shaky economy going, has been
gradually raising interest rates, in part to prop up the yen.
Last month, the Bank of Japan raised the benchmark interest rate
to 1.25% from 1.0%, a 31-year high. Its monetary policy board
meets again next week. The bank has an inflation target of about
2%.
The Japanese government has repeatedly stressed it’s working
closely with the Bank of Japan. The government of Prime Minister
Sanae Takaichi is promising a tax cut on food to 1% from 8% to
help lower-income families cope with soaring prices. That bill
is now being debated in Parliament.
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