The government is closely monitoring the effect of higher oil prices on the economy, economic and fiscal policy minister Hiroko Ota said Friday.
Crude oil rose to a record $90 a barrel in New York after the dollar fell against the euro, enhancing the appeal of commodities as an investment.
"It's true that rising oil prices would affect Japan's economy," Ota said at a news conference in Tokyo. Ota said she's concerned that small and medium-size companies may not be able to pass higher energy costs on to consumers, eroding their profits.
Confidence at small manufacturers and service providers fell in September, according to the Bank of Japan's quarterly "tankan" business survey released this month. They estimated profits would drop this fiscal year, a reversal from the growth in earnings forecast three months earlier.
