BOJ Deputy Governor Ryozo Himino said the Bank of Japan will monitor Middle East developments when deciding on monetary policy adjustments.
The central bank intends to continue raising the policy rate and will adjust the degree of monetary accommodation based on economic activity, price trends, and financial conditions.
Market expectations have built around a minimum 25 basis point rate increase in June, driven by concerns that the Middle East war could raise inflation in Japan.
While consumer inflation remains subdued thanks to government subsidies on gas and electricity, producer price inflation surged sharply in March and April, signalling an imminent spike in overall inflation.
