The slump in the yen, the war in Ukraine and a heat wave in Tokyo are pushing the world’s third-biggest economy toward a full-blown energy crisis.
Japan imports about 90% of its energy, mostly priced in dollars, and costs were already soaring from a jump in global oil, gas and coal prices, even before the yen fell to its lowest level in two decades.
The price of Brent oil, a benchmark for global trade, has risen more than 40% in dollar terms this year, bolstered by Russia’s invasion of Ukraine and a recovery in demand. But in yen terms, it’s up almost 70%. The average cost to import a ton of liquefied natural gas in the Japanese currency was almost 120% higher in May than a year earlier, according to the latest trade data.