The flow of Japanese corporate bonds has hit its slowest pace since 2023 as investors navigate heightened volatility stemming from the Middle East conflict. Bloomberg data reveals a roughly 60% decline in the number of yen-denominated deals planned at the start of the new fiscal year compared to the previous year. This sharp drop reflects growing unease among lenders, who face mounting pressure from potential further Bank of Japan rate hikes and increased borrowing costs linked to escalating tensions with Iran. The combination of geopolitical risk and central bank policy uncertainty is significantly tightening corporate financing channels in Japan.