Sumitomo Mitsui Banking fast: Escalating Middle East conflict increases Japan's inflation risk

Golden Ten Data reported on March 12 that Hirofumi Suzuki, Chief Foreign Exchange Strategist and Head of Research at the Treasury Department of Sumitomo Mitsui Banking Corporation, stated in an email that the impact of the Middle East conflict on Japanese inflation may currently be limited. However, Suzuki pointed out that, based on the benchmark level of $60 per barrel before the conflict, a 20% increase in crude oil prices would raise Japan's CPI by about 0.3 percentage points. Suzuki said: "This is increasing the risk that overall upward price pressure may substantially intensify." But he added, "(The Bank of Japan's rate hike) may be postponed. Although accelerating inflation is concerning, the negative impact on economic activity could also be quite significant."