Japan’s Economy Feels Iran War Inflation Faster Than Past Oil Crises

TOKYO – The economic shockwaves from escalating tensions in Iran are hitting Japan’s economy at a record speed, outpacing the impact of previous oil crises. Unlike the slow-burn inflation of the 1970s and 1990s, today’s price increases are driven by instant global market reactions. Japan imports nearly all its crude oil. When Iranian oil shipments faced disruptions, the price of a barrel jumped within days. This rapid spike has immediately increased costs for transportation, manufacturing, and household utilities. “This is different from the past,” said an economist at a Tokyo-based research institute. “In the 1973 and 1979 shocks, inflation took months to show up because of government price controls. Now, markets adjust prices in real time, and Japan feels the pain immediately.” Japanese households are already seeing the effects. A basic grocery basket now costs 8% more than last month, according to preliminary data. Gasoline prices have hit a five-year high, forcing small delivery companies to raise fees. The Bank of Japan has so far kept interest rates low, hoping to avoid slowing the fragile recovery. But analysts warn that if energy costs stay high, the central bank may have to choose between fighting inflation or supporting growth.