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For Japan, cheaper oil is a catch 22

Japanese business men walk along the street in Tokyo, Japan.
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Japanese business men walk along the street in Tokyo, Japan.

The spectacular crash in oil prices has obvious benefits for Japan, which imports all of its energy, but analysts caution that cheaper oil may dash any hopes of the Bank of Japan reaching its 2 percent inflation target.

"Cheap oil is good for profitability at Japanese corporations but has probably already tipped consumer price inflation (CPI) into negative territory," said Yasuhide Yajima, chief economist at the NLI Research Institute.

Both U.S. crude prices and Brent futures have more than halved since mid-2014, and hovered in Wednesday's trade at $46.27 and $46.90, respectively.