BOJ sees Middle East conflict leading to more price rises

TOKYO - The Bank of Japan said on Thursday the U.S.-Israeli war on Iran is likely to prod more firms to raise prices later this year, with the pass-through of costs occurring at a faster pace than in the past.

In its quarterly report on the country's regional economies, the central bank maintained its assessment for all nine areas, saying they were recovering or picking up moderately.

"While Middle East developments are causing some supply disruptions and a lack of raw material, the risk of exports and output falling sharply is receding," the report said.

On the price outlook, the report said many regions reported that firms were planning price rises for food and daily necessities from summer onward due to rising costs from the Middle East conflict.

"Many regions said firms continued to pass on rising labour and transportation costs," the report said.

"The pass-through of rising energy and raw material costs caused by Middle East developments is proceeding at a faster pace than in the past."

(Reporting by Leika Kihara; Editing by Christian Schmollinger and Thomas Derpinghaus)

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This story was originally published July 9, 2026 at 1:40 AM.