The International Monetary Fund urges the Bank of Japan to continue raising interest rates

The International Monetary Fund (IMF) urges the Bank of Japan to continue raising interest rates, despite the Middle East conflict posing a “significant new risk” to Japan’s economic outlook. The IMF stated in a Friday statement released in Washington that, although Japan’s economic growth is expected to slow partly due to the Iran conflict, gradual wage growth will support consumption. The statement was issued after policy consultations with Japan concluded. The IMF said, “The overall balance of risks to the economic outlook and inflation is tilted.” It expects inflation to approach the Bank of Japan’s 2% target by 2027. The IMF stated that its Executive Board agreed that it is appropriate for the Bank of Japan to exit its accommodative monetary policy. The statement said, “They noted that as the potential inflation rate approaches the Bank of Japan’s target, it is appropriate to continue a flexible, well-communicated, data-dependent approach to gradually raising interest rates to a neutral level.” (Sina Finance)