Higher prices: Japan warns of economic hit

The Japanese government warned on Monday that the Middle East crisis might have an impact on the economy through higher oil prices, while maintaining its stance that the economy was improving gradually.

Rising energy prices have already been a strain for the world’s third-largest economy, which relies on imports to meet the majority of its energy demands.

According to an official at the Cabinet Office, which published the monthly report for October, the developments in the Middle East “may pose a downside risk to the Japanese economy.”

“Higher import costs might have a detrimental impact on Japanese consumers, consumption, and business profitability,” the Japanese official warned.

The Japanese government’s monthly report also emphasized the importance of paying close attention to the consequences of rising prices and changes in financial and capital markets.

The yen recently fell below 150 to the dollar, its lowest level since October 2022, when the government intervened in the market to halt the decline. Markets view the 150 line as a danger zone that might prompt an intervention.