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

The International Monetary Fund urged the Bank of Japan to continue raising interest rates, despite the "significant new risks" to the Japanese economy posed by the Middle East conflict. In a statement released in Washington on Friday, the IMF said that while economic growth in Japan is expected to slow down partly due to the Iran conflict, gradual wage growth will support consumption. The statement was issued after policy discussions with Japan. The IMF stated, "the economic outlook and inflation risks are broadly balanced," with inflation expected to approach the Bank of Japan's target of 2% by 2027. The IMF agreed that the Bank of Japan's exit from loose monetary policy is appropriate. The statement said, "They noted that as the potential inflation rate approaches the Bank of Japan's target, interest rates should continue to be gradually raised to a neutral level in a flexible, smooth communication, and data-driven manner."