The four-times Asian champions got back to winning ways with a 2-0 victory over Thailand, but cannot afford another slip against Iraq, who are winless from their two group games.
Japan travel to Melbourne in a showdown clash with Group B leaders Australia the following Tuesday.
"There's always pressure in the final qualifiers but it can help motivate the players," Halilhodzic told reporters on Wednesday.
"At this phase of the qualifying competition, just playing well isn't good enough. You have to do remarkably well to get the job done," he added.
"And there will be even more at the World Cup finals because a billion people around the world will be watching it.
"The pressure and intensity only increases from here. Like I said, pressure is not necessarily a bad thing because it can motivate you."
Winger Manabu Saito was called into the Japan squad for the games against Iraq and Australia after Yoshinori Muto and Takashi Usami withdrew due to injury, and Halilhodzic said the Iraq game would be tough mental test for his players.
"Some are in good condition, some are tired. It really depends on the player," he added.
"We have to get them to recover as quickly as possible. I told them in a short speech that tomorrow will be a mental battle more than anything.
"The football itself isn't the difficult part. It's elsewhere. Iraq had a lot of time to train for this game whereas we haven't. We have enough quality on the team to qualify, and I believe we will win tomorrow."
The top two in Groups A and B qualify for the 2018 World Cup, while the third-placed teams meet to decide who goes into a CONCACAF-Asian Zone playoff for a place at the finals.
(Reporting by Nivedita Shankar in Bengaluru, editing by Ed Osmond)
