Year-over-year inflation in Japan is now 0.9%. While not much, after decades of deflation, it’s good news. That said, most of the inflation is the result of higher energy and electricity prices, not wages. And higher energy costs are the result of the yen’s recent 25% depreciation against the US dollar, combined with oil being priced in dollars and Japan having to import more oil than ever post Fukushima.
Tag Archives: energy prices
Pump it Up
Despite a US Energy Information Administration report that global oil reserves are 10% higher than in 2011, due to the discovery of 345 billion barrels of shale oil, don’t expect lower pump prices. This is because unlike Alaskan oil, shale oil comes from hundreds of small wells, with high production costs. If prices fall, pumping will cease. Thus, shale oil will only act to cap or dampen price rises.