The head of the BOJ's Osaka branch said cost pass-through between firms has accelerated and could begin feeding into consumer prices from summer; the BOJ will closely monitor any impact on consumer spending.

Goldman Sachs said in a July 8 report that renewed disruption to Strait of Hormuz shipping could impede restoration of Middle East oil supply. Goldman estimates Persian Gulf crude output in June remained about 10.5 mln bpd below pre-conflict levels. Despite producers beginning to restart shut wells last month, Goldman warned Hormuz interruptions could slow recovery: recent tanker attacks underscore elevated transit risk and, with ceasefire status unclear, shippers may hesitate to transit, weighing on flows. Goldman estimates flows have fallen to roughly 70% of normal after the recent attacks; earlier, within 10 days of the strait’s reopening, flows had climbed to over 80% of pre-conflict levels. Flows and oil prices face two-way risk: if the 60-day talks continue and shippers obtain security guarantees and Iran secures new waivers for sales, flows could recover by end-July; if talks break down and attacks escalate, flows could fall further.

US President Trump said he may strike Iran again tonight and will monitor developments before deciding. He said Iranian behavior was extremely bad and that the US struck Iran after Iranian attacks on ships in the Strait of Hormuz. He added any US strikes are aimed at preventing Iran from acquiring nuclear weapons, not regime change, and reiterated that Iran must not obtain nuclear weapons.