Oil Prices Dip on Improved Shipping Outlook; Japan's Fiscal Situation Grows More Pressing

Oil prices dipped on Wednesday due to an improved shipping outlook in the Strait of Hormuz. On the New York Mercantile Exchange, West Texas Intermediate crude for October delivery settled at $82.23 a barrel, down 0.16 percent from the previous day. Brent crude for October delivery fell 0.84 percent to close at $87.84 on the London ICE Futures Exchange.

Kodama Yuichi, chief economist fellow at the Meiji Yasuda Research Institute, warned that Japan's fiscal space may come under further pressure due to high interest rates and rising government debt. He noted that if interest rates continue to rise, the interest expense will increase every year, squeezing other expenditures and potentially leading to an intractable situation.

Japan's real GDP grew 0.3 percent quarter-on-quarter in the second quarter of 2026, while yields on Japanese long-term government bonds have continued to climb. The Ministry of Finance has raised the assumed interest rate for the fiscal 2027 budget to 3.8 percent, up from the previous 3 percent.