Japan's oil-yen squeeze and the return of stagflation risk

Japan's oil-yen squeeze and the return of stagflation risk

As tensions in the Middle East intensify, the immediate concern is the security of global energy supply. For Japan, however, the danger goes beyond whether crude prices rise. The more consequential question is how an external energy shock interacts with a weakening yen, soft domestic demand and an already delicate policy transition. What may look like another round of geopolitical volatility is, for Japan, turning into a broader test of economic