Economic activity, prices, and monetary policy in Japan
Speech by Mr Kazuyuki Masu, Member of the Policy Board of the Bank of Japan, at a meeting with local leaders, Fukui, 10 September 2026.
The speaker begins by expressing condolences for those affected by recent heavy rain. A year has passed since he joined the Policy Board, during which time the world has grappled with two major issues related to the United States: tariffs and Iran. The tariff issue did not disrupt the Japanese economy, but impacted export-heavy sectors like automobiles.
Iran's situation, however, has had broader repercussions due to the closure of the Strait of Hormuz, which has tightened the supply of crude oil and other materials. This could lead to rising inflation and economic slowdown, putting central banks worldwide in a tough position. In Japan, crude oil prices rose due to a supply shortage, while LNG prices increased without such a shortage.
Chart 1 shows the price developments in crude oil and LNG. Japan recently faced a situation where over 70% of its crude oil imports passed through the Strait of Hormuz, raising concerns over supply tightening more than transportation fuel shortages. Despite this, the necessary supply of transportation fuel and chemicals has been maintained through national reserves and alternative procurement.
Written by urgent.news from BIS Central Bank Speeches's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
