City gas and electricity charges have risen together in Japan, increasing costs for households and manufacturers, in what analysts attribute to fuel-linked tariff calculations coinciding with the expiry of support measures.

Japan's heavy reliance on imported liquefied natural gas means international prices and the exchange rate feed through to tariffs relatively quickly. A weak yen adds to the effect.

Manufacturing costs

In electricity-intensive chemicals, materials and metals, higher tariffs translate directly into costs. Some firms are said to be weighing more on-site generation and expanded night-shift operation.

For households, a larger share of spending going to heating and cooling is said to erode consumption. Regional differences in tariffs are also under discussion.

Regional spillover

Changes in Japan's procurement conditions affect the Asian spot market for liquefied natural gas, where Korea and Taiwan compete for the same cargoes.

Should countries compete to build stocks ahead of the winter demand season, price volatility could increase.