In November, Japan’s core consumer price inflation edged up to 3.7%, the highest level since 1981.
As a result of the Middle East crisis, oil production was disrupted, and energy prices skyrocketed.
Despite stagnant wages, Japanese consumers are now suffering from higher prices after decades of trying to boost inflation.
The Bank of Japan (BOJ) has kept its ultra-loose monetary policy to boost the economy.
It surprised the market earlier this week by raising the interest rate cap on its 10-year government bonds from 0.25% to 0.5%.
In response, the Japanese currency has spiked against the US dollar, reaching 151 yen to the dollar for the first time since 1990.
• Cost of living: The shock of rising prices in Japan
As a result of the war in Ukraine, the weak currency has contributed to the country’s inflation.
The Japanese economy has one of the lowest inflation rates in the world and has bucked the trend of other G7 countries that have gradually raised interest rates to curb soaring prices.
US inflation is 7.1%, EU inflation is 11.1%, and UK inflation is 10.1%.
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