BoJ’s Masu warns Iran war energy shock could hit Japan harder than 1973 oil crisis
Di Lallalit Srijandorn
Aggiornato: 14 May 2026
ARTICOLI POPOLARI
Bank of Japan (BoJ) policy board member Kazuyuki Masu said on Thursday that the impact of Iran war-driven energy shock on Japan’s economy may be more severe than 1973 oil crisis, risk requires attention.
Bank of Japan (BoJ) policy board member Kazuyuki Masu said on Thursday that the impact of Iran war-driven energy shock on Japan’s economy may be more severe than 1973 oil crisis, risk requires attention.
Key quotes
Impact of Iran war-driven energy shock on Japan's economy could be more serious than the first oil sock in 1973, a risk that warrants attention.
Rising personnel expenses, distribution costs and impact of weak yen are elements forming basis for Japan's inflation.
From a long-term perspective, the price of food in general is a key determinant of future inflation.
Given Japan is no longer in deflationary period, negative real rates should be addressed as soon as possible.
With policy rate near estimated neutral level, BOJ must more closely assess prices, employment and financial conditions for further moves.
Market reaction
As of writing, the USD/JPY pair is down 0.02% on the day at 157.85.
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
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