Oil at $70 won’t result in policy tightening

We expect the price of Brent crude oil to moderate from $70 per barrel to $55 by the end of 2018. But even if global oil prices remain close to current levels, inflation in Japan would only average 1% this year instead of our existing forecast of 0.7%. And with core inflation still close to zero, the BoJ wouldn’t respond with policy tightening.

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