Energy shortages have abated as Japan has been able to secure sufficient crude oil outside the Middle East and we expect that to remain the case. While the government's fuel price caps will continue to keep a lid on underlying inflation, we expect underlying inflation to climb to around 2.5% by early-2027. With the Bank of Japan increasingly concerned about upside risks to inflation, we now expect the Bank to hike rates once a quarter to a neutral level of 2% by mid-2027.