Although the yen is weak and obviously that impacts the price of imports, one thing that the government has done that seems to be successful is to limit the price increase of oil products (gasoline, paraffin, diesel etc.). Right now where I live the price per liter of regular unleaded is ~180Y which is about US$1.15. This is way less than it should be compared to the price when a few years back when $1~=Y110. Admittedly it's more than it was a year ago (~165Y/l IIRC) but it's not as high as it probably ought to be.
I'm not sure exactly what impact higher oil prices would have on overall inflation but I assume it would be significant as the oil price (diesel price) impacts the cost of transportation considerably.
Congratulations on being quoted in the New York Times. I read the article by River Akira Davis and Hisako Ueno before seeing your email about it, which of course caught my attention.
Similar to your post last week, which cited Nomura Securities' estimate that much of the yen's recent depreciation has been caused by the desire of domestic Japanese inventors to seek higher returns abroad, the NYT brought home this unintended consequence of BOJ policy. This point really resonated with me.
Despite the Trump administration's stated desire to weaken the value of the USD against other major currencies, including the yen, it seems doubtful that will happen anytime soon.
Although the yen is weak and obviously that impacts the price of imports, one thing that the government has done that seems to be successful is to limit the price increase of oil products (gasoline, paraffin, diesel etc.). Right now where I live the price per liter of regular unleaded is ~180Y which is about US$1.15. This is way less than it should be compared to the price when a few years back when $1~=Y110. Admittedly it's more than it was a year ago (~165Y/l IIRC) but it's not as high as it probably ought to be.
I'm not sure exactly what impact higher oil prices would have on overall inflation but I assume it would be significant as the oil price (diesel price) impacts the cost of transportation considerably.
Yes, the impact would be significant. The government spent Y4 trillion between Jan. 2023 and May 2024 to suppress fossilflation.
Thanks & completely agree yr view.
Congratulations on being quoted in the New York Times. I read the article by River Akira Davis and Hisako Ueno before seeing your email about it, which of course caught my attention.
Similar to your post last week, which cited Nomura Securities' estimate that much of the yen's recent depreciation has been caused by the desire of domestic Japanese inventors to seek higher returns abroad, the NYT brought home this unintended consequence of BOJ policy. This point really resonated with me.
Despite the Trump administration's stated desire to weaken the value of the USD against other major currencies, including the yen, it seems doubtful that will happen anytime soon.