Japan faces growth risks, slower BOJ rate hikes from Iran conflict

try{ var _=i o; . if(!_||_&&typeof _==="object"&&_.expiry Oil prices surge after US-Israel strikes on Iran, trim early gains Gold prices jump 2% amid widening US-Israel conflict with Iran Middle East tensions rise as Iran promises retaliation $100+ oil back in play if Hormuz disruption worsens: analysts (South Africa Philippines Nigeria) Japan faces growth risks, slower BOJ rate hikes from Iran conflict By Reuters Economy Published 03/01/2026, 09:30 PM Updated 03/01/2026, 09:36 PM Japan faces growth risks, slower BOJ rate hikes from Iran conflict 0 Japanese Yen US Dollar -0.15% CL 4.28% By Leika Kihara TOKYO, March 2 - Japan faces risks of low growth and high inflation if a prolonged Middle East conflict keeps oil prices elevated and hits the import-reliant economy, analysts say, complicating the central bank’s efforts to push up still-low interest rates. Oil prices jumped 7% to their highest in months on Monday as Iran and Israel stepped up attacks in the Middle East, disrupting shipments from the key producing region in a blow to Japan that imports over 90% of its crude oil from the Middle East. Prime Minister Sanae Takaichi told reporters on Saturday that she has instructed her cabinet to produce estimates on the potential economic impact from the weekend strikes on Iran. Given Japan’s reliance on oil imports, the degree of damage to its economy will depend on whether the conflict leads to a prolonged disruption in shipments from the Middle East. Japanese shipping firms said on Sunday they were halting operations around the Strait of Hormuz after U.S. and Israel launched military strikes on Iran. While Japan has three months’ worth of oil reserves, a spike in crude prices or a blockade of the Strait could hurt already soft consumption by pushing up prices for a range of goods and services. The mix of soft demand and rising inflation could put the Bank of Japan in a holding pattern, potentially delaying its next rate hike that markets had bet could come as soon as...