Bank of Japan (BOJ) Deputy Governor Ryozo Himino said on Tuesday the central bank will adjust monetary policy based on how Middle East developments affect Japan's economy and prices.
Himino stated the BOJ will continue to raise the policy rate and adjust the degree of monetary accommodation according to economic activity, prices, and financial conditions.
His comments come amid growing conviction that the BOJ will raise interest rates by at least 25 basis points in June, due to concerns over the inflationary impact of the Middle East conflict.
While Japanese consumer inflation has remained subdued thanks to government subsidies on gas and electricity, producer inflation surged in March and April, signaling an upcoming spike in inflation.
