Oil and currency swings top Japan firms’ risks, poll finds

Japanese companies ranked crude oil market volatility as their leading earnings risk in a Reuters survey released on October 8, 2026, with about 37% of respondents selecting it ahead of currency movements and higher interest rates. Nikkei Research conducted the survey for Reuters between September 18 and October 2, contacting 508 companies. Of those, 215 responded on condition of anonymity.

Japan’s limited domestic resources leave the country heavily dependent on imported oil: the Middle East supplied 94% of its crude imports in 2025. The US-Israeli war on Iran, which began on February 28, has restricted crude supplies and raised energy costs, with price increases extending to oil-derived products such as vehicle components and construction materials.

Higher rates and AI investment add to Japan’s earnings risks

Foreign exchange movements were the main earnings risk for 21% of companies surveyed, while 19% chose higher interest rates. Several respondents also questioned the sustainability of investment in artificial intelligence (AI), which has increased demand for advanced microchips and driven rapid construction of data centres.

The Bank of Japan raised interest rates in September to a 31-year high. Governor Kazuo Ueda signalled a shift towards preventing inflation from exceeding the central bank’s target, leaving scope for further increases. 

“Rising energy costs driven by the crude oil market and investment cutbacks during a period of rising interest rates that are cooling domestic demand for cement - those are the risk factors,” a manager at a ceramics company wrote in the survey. The sector includes manufacturers of glass, cement and ceramic products.

“Real estate demand is bound to slow down because of higher rates,” a manager at a property company said in the survey.

A respondent at a machinery manufacturer highlighted the difficulty of assessing how long the AI investment boom could support orders. “It is vitally important for corporate management to ascertain how much longer an increase in demand brought about by AI investment lasts and when such demand starts turning lower,” the respondent said.

The Mitsubishi Research Institute said in September that AI investment, particularly in data centres, was expected to grow over the medium to long term. However, power constraints, tighter regulation and rising costs could alter the pace of spending.

Japan firms show greater caution over second-half earnings

The Reuters survey found slightly more Japanese companies expecting second-half net earnings to fall below their original forecasts than to exceed them, although most expected results to remain in line. First-half expectations were more positive, with companies anticipating results above their forecasts outnumbering those expecting a shortfall.

Most major Japanese companies begin their financial year in April. Results for the April–September period are due later in October and during November.

Oil prices fall as IEA backs faster stock releases

Oil prices finished a volatile October 7 session lower after the International Energy Agency (IEA) agreed to accelerate stock releases and prioritise diesel to help contain record-high fuel prices as the Iran war constrains supplies.

Brent crude futures settled at US$100.20 a barrel, down 38 US cents, or 0.38%. US West Texas Intermediate (WTI) crude fell US$1.16, or 1.3%, to US$88.28 a barrel.

The IEA said in its October 7 statement that completing previously announced emergency stock releases as quickly as possible could bring about 100 million barrels to market. Analysts and some governments cautioned that the volume did not necessarily represent a new intervention of that size. 

Franceinfo radio reported on October 7, citing unnamed sources, that France would release 10 million barrels of diesel from its strategic reserves.

John Kilduff, a partner at Again Capital, described Europe as “ground zero for this whole supply crunch”. Kilduff said the releases could ease demand for WTI and reduce pressure on US supplies.

US crude inventories fell by 3.2 million barrels to 424.1 million barrels in the week ending October 2, according to the US Energy Information Administration (EIA), against expectations in a Reuters poll for a 1.7 million-barrel increase. The EIA’s inventory data also showed a decline in distillate stocks and an increase in petrol inventories. 

Conflict and Gulf storm threaten further supply disruption

Investors remained doubtful that recent increases in Middle Eastern supplies and exports could be sustained, said Tamas Varga, an analyst at oil broker PVM.

Varga said the approaching US storm and continuing conflicts in the Middle East and Ukraine were supporting prices.

Yemen’s transport ministry said Houthi forces attacked Aden international airport with missiles and drones as fighting intensified between the Iran-aligned group and Saudi-backed government forces.

Again Capital’s Kilduff said attacks in the Middle East had limited Brent’s losses relative to those of US crude futures.

A senior Iranian official told Reuters that US “requests and ideas” concerning Iran’s nuclear programme conflicted with Tehran’s demands. The official was responding to US Vice President JD Vance’s statement that Iran must reduce enrichment to end the war.

Ukrainian officials said Ukraine struck two Russian oil facilities, while Russian missile and drone attacks on Ukraine killed at least 15 people.

Vitol chief executive Russell Hardy said on October 6 that attacks on Russian energy infrastructure and reduced refining activity in the Middle East had tightened fuel markets.

US forecasters said on October 6 that a storm developing in the Gulf of Mexico was expected to become the first Atlantic hurricane of 2026 within two days and was likely to hit oil and gas facilities.

The US Gulf of Mexico produced 2.05 million barrels of crude a day in September, accounting for about 15% of national production, according to the EIA.
Consultancy Earth Science Associates projected that about 11.2 million barrels of Gulf oil production could be lost during the storm, compared with 7.1 million barrels affected by Tropical Storm Bertha in July.

KCM Trade chief analyst Tim Waterer described the storm as an “unwelcome complication for crude, raising the prospect of production and refining disruptions at a time when the market already has enough supply-side headaches”.