The Japanese government notes in its annual white paper released on Friday that compared to when the 2022 war in Ukraine drove up fuel costs, Japanese companies are passing on the rising costs caused by the Middle East conflict to consumers at a faster rate. According to the white paper, inflation expectations of businesses and households are also rising at an accelerated pace. This is consistent with the Bank of Japan's view that inflationary pressure is becoming entrenched in this country once mired in deflation. The white paper notes that “the willingness of companies to spend is still strong, and investment plans have exceeded the historical average for two consecutive years,” which highlights the resilience of the Japanese economy in dealing with energy shocks caused by conflict. However, the white paper warns that “close attention” is needed to the extent to which the Middle East conflict may affect Japan's economy and output gap. The white paper was prepared by the Cabinet Office. Minister of Economy and Finance Minoru Jonouchi is responsible for the Cabinet Office; outsiders believe that he is cautious about the Bank of Japan's interest rate hike plan.

The Japanese government notes in its annual white paper released on Friday that compared to when the 2022 war in Ukraine drove up fuel costs, Japanese companies are passing on the rising costs caused by the Middle East conflict to consumers at a faster rate. According to the white paper, inflation expectations of businesses and households are also rising at an accelerated pace. This is consistent with the Bank of Japan's view that inflationary pressure is becoming entrenched in this country once mired in deflation. The white paper notes that “the willingness of companies to spend is still strong, and investment plans have exceeded the historical average for two consecutive years,” which highlights the resilience of the Japanese economy in dealing with energy shocks caused by conflict. However, the white paper warns that “close attention” is needed to the extent to which the Middle East conflict may affect Japan's economy and output gap. The white paper was prepared by the Cabinet Office. Minister of Economy and Finance Minoru Jonouchi is responsible for the Cabinet Office; outsiders believe that he is cautious about the Bank of Japan's interest rate hike plan.