Inflation has risen in Japan and the United Kingdom amid escalating energy costs linked to the ongoing conflict between Israel, the United States, and Iran, according to official data released in both countries. The war, now in its second month, has disrupted global energy markets, particularly affecting nations heavily reliant on Middle Eastern oil imports.
In Japan, consumer inflation accelerated to 1.8 percent in March, driven primarily by rising food prices, including staple items like rice. Excluding volatile fresh food prices, consumer prices rose 1.6 percent year-on-year in February and surpassed market expectations of 1.7 percent in March. The Bank of Japan had previously warned that inflation could increase due to recent spikes in crude oil prices triggered by the Middle East conflict.
Despite the overall inflation rise, gasoline prices in Japan fell 5.4 percent in March after the government launched an emergency subsidy program to reduce fuel costs. Japan depends on the Middle East for approximately 95 percent of its petroleum imports, making it especially vulnerable to regional supply disruptions.
In the United Kingdom, inflation increased in March following a sharp rise in gasoline prices stemming from interrupted energy supplies caused by the war with Iran. The disruption has affected global energy flows, particularly through key maritime routes such as the Strait of Hormuz, through which about 20 percent of the world’s oil and gas typically passes.
The economic ripple effects of the conflict have prompted coordinated concern among several nations. In mid-April, finance ministers from eleven countries—including Spain, Japan, and the United Kingdom—called for a coordinated, responsible, and agile economic response to the war in the Middle East. The group, which also includes Australia, Sweden, the Netherlands, Finland, Norway, Ireland, Poland, and New Zealand, emphasized risks to global growth, inflation, and financial markets.
The ministers urged a swift and durable negotiated resolution to the conflict and called for the restoration of safe and free transit through the Strait of Hormuz. They warned that renewed or expanded fighting would pose significant additional risks to global energy security, supply chains, and economic stability.
Earlier in April, the International Monetary Fund revised its global growth forecast downward by 0.2 percentage points to 3.1 percent for the year, citing the war’s beginning impact on the global economy. The G7 foreign ministers convened in Japan later that month to discuss the Middle East crisis, reaffirm their support for Ukraine, and address regional tensions including those in Nagorno-Karabagh and with China.
U.S. Secretary of State Antony Blinken, upon arriving in Tokyo, urged G7 counterparts to speak with one voice on the Israel-Hamas conflict, drawing parallels to their unified stance on Ukraine and other international crises. Blinken had recently completed an intensive diplomatic tour of the Middle East before the summit.
The discussions in Japan highlighted the challenge of achieving consensus among G7 members on humanitarian pauses in Gaza, with the U.S. Having discussed with Israel the possibility of “tactical pauses” to allow civilian evacuations, though the duration of such truces remains debated.
As the conflict continues to influence energy prices and inflation trends in import-dependent economies, officials in Japan and the UK are monitoring developments closely. Japan’s emergency fuel subsidy program and the UK’s response to gasoline price spikes remain key policy tools in mitigating immediate household impacts.
For ongoing updates on inflation data, energy market trends, and international diplomatic efforts related to the Middle East conflict, readers are encouraged to consult official sources such as the Bank of Japan, the UK Office for National Statistics, the International Monetary Fund, and the G7 official channels.
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