Source: CCTV Finance and Economics
The rising international price of crude oil has pushed the price of gasoline in Japan to its highest level since October 2018. What is the impact of rising oil prices on the Japanese economy and people's lives?
Kawasaki City, Kanagawa Prefecture, which is close to Tokyo, is one of the major petrochemical bases in Japan. Japan relies almost entirely on imports for its oil supply, so the rise in international oil prices has led to a steady rise in the price of Japanese petroleum products. At a gas station here, you can see that the price of regular gasoline shown at the top of the price board is now 160 yen per liter, or about 9.2 yuan. The latest figures released last week show that the average price of regular gasoline in Japan has risen for five consecutive weeks, to 160 yen, a three-year high and up nearly 30% from its lowest level since the outbreak.
Oil accounts for more than 10% of Japan's imports, and changes in oil prices will have a significant impact on Japan's trade balance. Statistics released by Japan's Ministry of Finance last week showed that Japan's trade deficit reached 165.8 billion yen, or about 9.6 billion yuan, in early and mid-September. In addition to the decline in car exports, rising oil prices led to an increase in oil imports. It is also an important factor leading to the deficit.
On the other hand, the continued rise in oil prices has also added unease to investors in Japan's capital markets. In particular, the yen fell to its lowest level in about two and a half years, which will further increase the burden on Japan's oil imports. So investors are worried that Japanese corporate profits are being squeezed, which is also an important factor contributing to the recent decline in the Japanese stock market.
And if oil prices rise to an unbearable level, they are likely to be passed on to consumers eventually. In addition to consumer-sensitive gasoline prices, higher fuel costs for fishing boats and agricultural greenhouses will trigger higher food prices. In addition to being used as fuel, the production of plastics, household lotions and even cosmetics is also related to oil. As oil prices continue to rise and spread to more industries, Japanese households will also face more pressure on spending.