Despite strong upward pressure on oil prices from the Middle East conflict, much
of the impact on Japan’s energy costs is likely to be offset by government
subsidies, economists at Mizuho Securities say.
They note that the pass-through to goods—mainly food—will emerge more gradually,
with inflation in these categories expected to peak between spring and autumn
2027, implying a four- to six-quarter lag.
“With security in the Strait of Hormuz unlikely to be restored quickly and
transit not yet fully normalized, crude prices are expected to remain elevated
for now,” they add.
