Sanae Takaichi is confronting the first major challenge since her landslide election victory last month, as economists warn that sustained high oil prices could push Japan’s economy towards recession.
The war in Iran has thrown Japan’s heavy reliance on energy imports, particularly from the Middle East, and its vulnerability to energy market turmoil into stark relief, analysts said.
The country imports almost all of its energy and much of its food, meaning that turmoil in energy markets, combined with prolonged weakness in the yen — already trading near two-year lows — could quickly translate into higher inflation.
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