Institution: The Middle East supply shock was first reflected in Japan's CPI in June

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Golden Finance reports that on May 22, Daiwa Securities economist Kento Minami stated that the supply shocks caused by tensions in the Middle East are likely to first appear in Japanese consumer prices as early as June. The impact of geopolitical risks has not yet been reflected in April's data, partly due to government energy subsidies. In April, consumer inflation excluding volatile fresh food rose by 1.4% year-on-year, below the 1.8% increase in March. Minami said that although Japan has made progress in finding alternative sources of oil, the increased costs resulting from longer transportation distances are unavoidable and are expected to become a factor pushing prices higher in the future. He added that concerns about supply restrictions may persist due to differences in crude oil quality and logistical bottlenecks. (Jin10)
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