Key facts
- Japanese companies anticipate a prolonged recovery and potentially permanently altered supply chains following the U.S.-Iran peace deal.
- Nearly half of Japanese firms expect business operations to take over six months to normalize.
- Almost all Japanese companies remain concerned about oil and oil product procurement due to the nation's heavy reliance on Middle Eastern crude.
- The Strait of Hormuz, a critical transit point for 93% of Japan's Middle East oil imports, requires time for minesweeping and safe navigation restoration.
- 30% of Japanese companies now consider the misuse of advanced AI a top emerging business risk.
Corporate Japan is bracing for a prolonged period of supply chain instability and elevated costs, even after a U.S.-Iran peace deal and the reopening of the Strait of Hormuz. Companies and analysts warn that the disruptions caused by the conflict will not quickly revert to pre-war norms, with many anticipating a "new normal" characterized by higher prices and potentially reduced product packaging.
A survey by Nikkei Research for Reuters revealed that nearly half of Japanese firms believe it will take more than six months for their operations to return to pre-war normalcy. This sentiment persists despite the interim agreement between Washington and Tehran. The country's heavy reliance on Middle Eastern crude oil, 94% of which is imported, and the critical transit role of the Strait of Hormuz, through which 93% of these shipments pass, underscore these concerns.
Experts suggest that the process of clearing mines and ensuring safe passage through the strait could take months, impacting the recovery of crude oil procurement. While the Japanese government has assured the public about securing necessary supplies, a significant portion of companies remain worried. 27% of respondents are "deeply worried" about oil and oil product procurement, with another 69% expressing some level of concern. Some manufacturers have reported only securing firm supply commitments for certain raw materials for a maximum of two months.
Beyond supply chain issues, the survey also highlighted emerging risks related to artificial intelligence. Approximately 30% of Japanese companies now view the misuse of advanced AI models as a top priority issue, a concern that has risen in prominence alongside traditional cybersecurity threats. This has led some firms, like SoftBank Group, to increase investments in "sovereign AI" capabilities to mitigate risks such as data leakage and sophisticated cyberattacks.
Global markets have shown some relief, with U.S. stock futures rising and crude oil prices falling, signaling optimism about easing geopolitical tensions. However, for Japanese industry, the path to full recovery appears to be a slow and uncertain one.