‘Japan firms’ oil price impact limited so far’

TOKYO: High oil prices have yet to seriously affect Japanese firms’ production and capital spending plans, but there was a need to stay alert for signs of further rises hurting earnings, a government survey showed on Friday, A survey of 93 large companies by the Ministry of Economy, Trade and Industry (METI) found 40 percent of respondents had been able to pass on higher oil costs to customers, or had been mostly able to do so.

Another 40 percent said they had difficulties transferring the costs. The result was little changed from a survey conducted last August, METI said.

“There is a possibility that the effects of high prices may become clearer and so close monitoring continues to be needed given worries that businesses and earnings may be affected, even indirectly,” the ministry said.

Japan depends almost entirely on imports for its oil and ranks third in world oil consumption after the United States and China, with about 90 percent coming from the Middle East. Middle East benchmark Dubai rose to a record high above $48 a barrel last week, Reuters data showed.

The survey showed that pharmaceutical, fibre and paper companies were most likely to be affected by the rise in oil prices. Automobile, steel and electronics firms were likely to be the least affected, it said.

The survey, taken between March 3-18, also found 70 percent of respondents expected the price for oil and oil-related products to rise further, with 20 percent saying prices would remain high for another year or longer. But METI noted that the yen’s appreciation from last year may be making it easier for companies to offset rising energy costs. —Reuters

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