US-Iran accord signals potential relief for Middle East energy markets
US-Iran accord ends conflict but Strait of Hormuz reopening delayed, limiting near-term energy relief.
Event / Economy
Japan Monetary Policy Rate Hike
Bank of Japan raises policy rate to 1% to combat inflation and yen weakness amid Middle East energy disruptions, while Japanese government expresses concern about economic impacts.
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2026-08-16 to 2026-11-13 · UTC publication dates
Coverage begins 16 Jun, 04:33 UTC
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What happened
Bank of Japan warns of continued inflation risks from oil prices
The Bank of Japan cautioned that the impact of rising crude oil prices is propagating at a sustained pace in business-to-business transactions, which could lead to increased consumer prices across a wide range of products. The central bank also warned of a risk that underlying inflation could deviate upward and exceed its 2% target.
Japan experiences sustained inflation above 2% since spring 2022
Japan has experienced sustained consumer price inflation above 2% since spring 2022, ending its long history of deflation. This persistent inflation prompted the Bank of Japan to progressively tighten monetary policy starting in 2024 after years of zero or negative rates.
Bank of Japan to reduce debt purchase program through April 2027
The Bank of Japan announced on Tuesday that it will continue gradual reduction of its Japanese government bond purchase program until April 2027, after which it will stabilize its monthly purchase volume.
Japanese government spends 11.7 trillion yen to support yen currency
Last month, the Japanese government spent approximately 11.7 trillion yen (63 billion euros) to support the yen currency, though the intervention had only temporary effects that were quickly overwhelmed by anticipations of Federal Reserve rate increases.
United States and Iran reach agreement to end Middle East war
The United States and Iran reached an agreement on Monday to end the war in the Middle East. The agreement led to a sharp decline in crude oil prices.
Bank of Japan raises policy rate to 1%, highest level since 1995
The Bank of Japan raised its policy interest rate to 1% on Tuesday, the highest level in over three decades. This decision was in line with market expectations and aims to combat yen weakness and inflation driven by Middle East energy disruptions.
Strait of Hormuz reopening expected to take considerable time
Following the US-Iran agreement to end the Middle East war, the reopening of the Strait of Hormuz is expected to take significant time, as will the restart of hydrocarbon production in the region.
Middle East oil disruptions drive energy price surge affecting Japan imports
Energy prices have surged due to paralysis in hydrocarbon shipments from the Persian Gulf, from which Japan imported 90% of its oil before the conflict. The resulting spike in crude oil prices has intensified inflationary pressures on Japan's economy.
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BOJ raises rates to 1% amid persistent inflation pressure
BOJ raises rates to 1% amid persistent inflation from oil price pressures and currency weakness.