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 ful

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.