The geopolitical conflict in Iran has had a significant impact on Japan. As of the week ending March 27, overseas investors sold a net total of approximately ¥1.51 trillion in Japanese spot stocks, marking the largest weekly net sell-off since September 2024. Japan is highly dependent on Middle Eastern energy. About 95% of Japan's crude oil imports come from the Middle East, with roughly 70% needing to pass through the Strait of Hormuz. If the conflict escalates, the market's concerns extend beyond just crude oil prices to include rising costs across transportation, insurance, and supply stability. Although the Japanese government has urgently released strategic oil reserves to address the situation, market worries about the duration of the conflict and its subsequent impacts are unlikely to dissipate in the short term. This has led to significant capital outflows. Bitget VIP—lower fees, bigger perks!