Japan's Consumer Prices May Reflect Middle East Tensions by June, Economist Says

Economist Kento Minami from Daiwa Securities has indicated that the supply disruptions caused by Middle East tensions could start affecting Japan's consumer prices as early as June. According to Jin10, the impact of geopolitical risks was not evident in April's data, partly due to government energy subsidies. In April, consumer inflation excluding volatile fresh food rose by 1.4% year-on-year, which is lower than the 1.8% increase in March. Minami noted that while Japan has made progress in finding alternative oil sources, the increased transportation costs due to longer distances are inevitable and are expected to contribute to rising prices in the future. He added that concerns over supply constraints might persist due to differences in crude oil quality and logistical bottlenecks.