The share of Japanese companies opposed to a Bank of Japan (BOJ) rate increase has climbed markedly since the start of the year, according to a corporate survey carried out by Nikkei Research from April 1-10. Heightened geopolitical risk from the U.S.-Israel war on Iran and the resulting disruption of energy shipments through the Strait of Hormuz have pushed up oil prices and raised worries about global supply interruptions, prompting many firms to question the timing of further monetary tightening.
When asked the most suitable timing for the BOJ’s next policy hike, respondents were split. Ten percent favoured an increase in April, 8% picked June, 37% said the second half of 2026, and 16% preferred 2027 or later. Crucially, 30% said they did not want a rate rise at all, a substantial increase from 17% who held that view in a January survey.
Several respondents tied their reluctance directly to higher crude prices and the uncertain situation in the Middle East. One manager at an electronics firm questioned the rationale for further rate lifts, noting the tense conditions in the region and elevated oil prices. BOJ Governor Kazuo Ueda has recently underlined the need for vigilance about potential fallout from the Iran war when discussing the monetary outlook, providing a more cautious tone compared with prior forward guidance about continued rate increases.
The central bank’s next policy meeting is scheduled for April 27-28, with a subsequent meeting in June.
The survey also measured current and anticipated operational impacts from the conflict. About 28% of companies said they are already experiencing effects attributable to the Iran war, while a further 56% believe they will eventually be affected. The most commonly cited specific impacts are rising fuel and raw material costs, higher transportation expenses, and difficulties procuring fuel and raw materials.
An official at a transportation company highlighted a core concern: potential shortages of crude oil, naphtha derived from crude, and key intermediate products. That official warned such shortages could stall manufacturing output, slow shipments and reduce cargo volumes.
Japan’s exposure to Middle Eastern oil adds context to these worries: in 2025, the country sourced 94% of its crude oil from the Middle East, according to the survey data.
Firms expressed differing thresholds for what average crude prices would allow continued profit growth. Forty-two percent said they would likely be able to post profit growth for the business year that began this month if U.S. West Texas Intermediate crude futures average $100 a barrel or lower; 28% set that threshold at $80.
Companies are already reacting to higher costs. Seven percent have raised prices on products and services, while 62% are considering passing costs on to customers. Thirty-one percent said they have no plans to raise prices.
The survey also captured the ongoing effects of recent U.S. trade policy. Twenty-two percent of respondents reported a substantial earnings hit from the tariffs imposed by the U.S. administration, while 15% said the impact had been reduced after taking countermeasures such as passing through costs to customers or shifting production to the United States. Slightly more than half of respondents said they were not affected by those levies in the first place.
On the legal and policy front, respondents noted the U.S. Supreme Court in February struck down the global tariffs as illegal under a national emergency law, after which a 10% tariff was imposed for 150 days under the Trade Act of 1974.
One manager at a transportation equipment maker encapsulated a common corporate dilemma: firms want to capitalise on a weaker yen to boost exports, but U.S. tariffs are limiting that opportunity.
Methodology
The poll was carried out by Nikkei Research from April 1-10. Nikkei Research contacted 492 companies and received 212 responses, all provided on condition of anonymity.