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Intense Fighting in Middle East, Japan Feels the Pinch

Global Times 2026-03-02 22:21:33

Due to the potential military actions by the US and Israel against Iran, international energy prices are surging. This is causing significant difficulties for Japan, which heavily relies on imported energy.

According to Japan’s NHK television network, on Monday this week, crude oil prices in Japan’s commodity market surged to a 13-month high.

Another report by a Japanese media outlet cited analyses from multiple Japanese economic experts, stating that if the war turns into a prolonged conflict and the Strait of Hormuz remains inaccessible for an extended period, it would affect the production and transportation of many industries in Japan, including agriculture and fisheries. Costs such as electricity and gas would significantly increase. Japan's GDP could potentially drop by three percentage points, turning into a "matter of life and death" for Japan.

These experts also pointed out that a series of measures previously pledged by Japanese Prime Minister Kishida Fumio during Japan's early general election to tackle high prices are likely to become ineffective under the situation caused by the United States.

Bloomberg, a U.S. media outlet, has also noted Japan’s awkward predicament. It reported that the “inflationary shock” inflicted on Japan’s economy by U.S. military action against Iran will pose a major governance challenge for Takashi, who pledged during the previous election to curb the cost of living in Japan: rising energy prices will not only exacerbate Japan’s trade deficit but also further depress the yen’s exchange rate—which has already been persistently weakening under Takashi’s administration—thereby intensifying the pain of inflation.

What's more challenging is that if Kishi opts to further increase fiscal spending to address the current situation, experts interviewed by Bloomberg believe this would instead add more uncertainty to Japan's economic outlook, which is already not well-regarded by outsiders.

It seems that Takashi, who previously provocatively linked the Taiwan issue with what Japan calls a "situation that could threaten its survival," may now have to face a real "situation that could threaten its survival" caused by the United States.

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Intense Fighting in Middle East, Japan Feels the Pinch

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