(March 9): The surge in oil prices combined with a sagging yen raises the risk that Japan will slide into stagflation, prompting the government to ramp up fiscal spending while complicating the central bank’s mission to normalise its policy settings. In the current predicament, the surge in oil costs comes on top of weakness in the yen, with both revving up price pressures. “A spike in oil on top of a weak yen would weigh heavily on Japan’s economy. The risk of stagflation is rising without a doubt.”Kodama stressed that it all depends on how long oil prices stay elevated. Japan’s reliance on oil from the Middle East has hovered around 90%, hitting 95.1% in January, according to Japan’s Trade Ministry.

Source: The Edge Markets March 09, 2026 02:46 UTC