Japan Likely To Face Continued Inflation Pressure, BNP Paribas Says

BNP Paribas economists said Japan was likely to continue facing inflation pressure, with import prices expected to remain above levels seen before the Middle East crisis. According to Jin10, they said that although tensions around the Strait of Hormuz had eased, Japan’s shift toward higher-cost U.S. crude oil purchases, sharply higher insurance costs, and a weaker yen were expected to keep import costs elevated. They added that domestic demand in Japan was expected to stay resilient, supported by an artificial intelligence investment boom and a strong stock market. The economists said that as the situation in the Middle East improves and geopolitical uncertainty gradually fades, Japan’s overall demand in the second half of the year may still be strong.