Economic Warning Issued Over Middle East Supply Chain.

With the 2026 fiscal year approaching, Japanese economic institutes have released a "pessimistic scenario" report regarding energy security. The report highlights that a potential disruption in the Strait of Hormuz could drive crude oil prices toward $140 a barrel, threatening Japan with "stagflation"—a mix of stagnant growth and high inflation. The institute projects that even a partial disruption could shave 0.18% off Japan’s GDP. In response, there is growing debate within the government about implementing new refundable tax credits and pausing planned interest rate hikes to protect household purchasing power.

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