Japan Cuts FY2026 Growth Forecast Amid Higher Oil Prices and Weaker Yen

The Japanese government has revised its economic growth forecast for the current fiscal year downward to 0.9 per cent, citing the impact of higher crude oil prices on the country's import-dependent economy.

The revised projection was announced in the government's midyear economic outlook released on Thursday, which also noted that a weaker yen against the US dollar and elevated crude oil prices resulting from the conflict in the Middle East pose risks to the economy.

Despite wage growth and personal consumption being supported by government subsidies for energy costs, Japan remains vulnerable to higher crude oil prices, while a weaker yen also increases import costs.