Bank of Japan says it sees inflation rising on oil price spike

2026-03-19 - 04:00

Japanese Prime Minister Sanae Takaichi has vowed to address inflation and shore up the world’s fourth-largest economy. (EPA Images pic) TOKYO: Japan’s central bank said Thursday it expected inflation to increase because of the “recent rise in crude oil prices” caused by the Middle East war. The Bank of Japan also said in a statement that it had left its key interest rate unchanged at 0.75%. While officials see the consumer price index easing below two percent thanks to the easing cost of food including rice — and partly thanks to government measures — they warned “the rate of increase is then expected to (see) upward pressure, affected by the recent rise in crude oil prices”. Public discontent over rising prices largely contributed to the downfall of former prime minister Shigeru Ishiba, whom Sanae Takaichi succeeded in October vowing to address the issue and shore up the world’s fourth-largest economy. The Bank of Japan began hiking rates from below zero in 2024, as figures signalled an end to the country’s “lost decades” of stagnation. The monetary status quo was widely anticipated by analysts.