Even for such basic assumption, we should monitor without prejudgment whether it will become a reality as assumed. Geopolitical risk concerning Iran is also a source of concern. If there is mounting tension and oil prices surge, it will be an upward pressure on prices in Japan, while economic activity will deviate downward from the baseline scenario through a deterioration in corporate profits.
As  BIS central bankers’ speeches  5  a surge in oil prices could also lead to a slowdown in emerging economies, sufficient attention should be paid to future developments. As for domestic factors, there is a possibility that conditions surrounding electric power supply and demand will become increasingly severe toward this summer in a wide area including the Shikoku region.