Cheap Oil Not Necessarily Helping Japan

The spectacular crash in oil prices has obvious benefits for Japan, which imports all of its energy, but analysts caution that cheaper oil may dash any hopes of the Bank of Japan reaching its 2 percent inflation target.

“Cheap oil is good for profitability at Japanese corporations but has probably already tipped consumer price inflation (CPI) into negative territory,” said Yasuhide Yajima, chief economist at the NLI Research Institute.

Both U.S. crude prices and Brent futures have more than halved since mid-2014, and hovered in Wednesday’s trade at $46.27 and $46.90, respectively.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.