About this work
Japan faces an energy shock concentrated in its reliance on Middle Eastern supply routes. A 20 percent increase in Brent would raise its fuel bill by roughly half a percentage point of GDP and lift headline inflation by around 0.6 percentage points under baseline assumptions. Yen weakness and sharper gas prices could amplify the shock, narrowing room for fiscal support and monetary normalization.
Cite this work
Jonathan Fortun (2026). IIF Asia Economic Views: What the Iran War Means for Japan. Institute of International Finance.