0412 GMT - The Middle East conflict and consistently weak wage data are a double threat for Japan's economy, says Stefan Angrick at Moody's Analytics. The conflict has sent commodity prices surging, inflating the country's import bill, weakening the trade balance and the yen. That's a dual hit for households and businesses--a worrying echo of the inflation shock after the pandemic and the Ukraine war. Wage growth hasn't proved resilient despite record pay bumps. And while this year will likely be another strong outcome, that isn't translating into economywide wage growth the way it used to, he says. All this scrambles the path for the Bank of Japan. It can hold to cushion the economy, risking a weaker yen and higher inflation, or it can defend the yen and contain prices, but inflict economic damage. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

March 16, 2026 00:12 ET (04:12 GMT)

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