Japan Market Daily | Kabutaro & Friends

On May 2, 2026, while major financial markets were closed for the weekend, the global economic outlook was clouded by surging crude oil prices due to escalating Middle East tensions. Following Iran's warning of a total blockade of the Strait of Hormuz, WTI crude futures surpassed 115 dollars per barrel, intensifying fears of severe impacts on manufacturing and logistics. In the U.S., while the latest employment data showed resilience, signs of re-accelerating inflation revived expectations for further Fed rate hikes, pushing long-term yields higher. In Japan, the dual pressure of a weak yen and high resource costs has prompted major utility companies to consider further electricity price hikes, placing a heavy burden on households. Meanwhile, China introduced new measures to expand the use of the yuan in trade settlements with Belt and Road partners, signaling a clear move toward de-dollarization and reflecting an accelerating fragmentation of global economic blocs amid heightened geopolitical risks.