Yamato: Rising oil prices are putting the Japanese economy at risk of falling into a vicious cycle.

Economist Kenji Yamamoto from Yamato Securities stated that a rise in oil prices may lead Japan into a vicious cycle, where deteriorating trade deficit causes the yen to weaken, and the weakening yen further pushes up import prices. He said, "The input inflation caused by the weakening yen will accumulate upward price risks over time." He added that in the long run, this will continue to build up potential inflationary pressure. The economist believes that whether the Bank of Japan will raise interest rates in April is likely to be a turning point in determining how much confidence the market has in the central bank's commitment to tightening policy.