[IMF: Bank of Japan Can Ignore Inflation Shock from Middle East Conflict] Jin10 News, April 16 – Rahul Anand, the International Monetary Fund (IMF) mission chief for Japan, stated on Wednesday that the Bank of Japan (BOJ) can "ignore" inflationary pressures stemming from the Middle East conflict, as the second-round effects on broader prices are expected to be limited. Although the war has driven up fuel costs, leading to higher overall inflation, the BOJ can still adhere to its gradual rate hike path, as these price pressures are unlikely to unanchor inflation expectations. "Higher prices are unlikely to pass through to core inflation or wages, so we believe the second-round effects will be milder compared to other countries. Even if overall inflation temporarily rises, the BOJ can disregard this and proceed with its planned exit from accommodative policies," Anand said. The IMF still expects Japan's inflation to return to its 2% target by the end of 2027 and forecasts that the BOJ will raise rates three more times by mid- or late next year, increasing the policy rate from the current 0.75% to 1.5%. Anand also noted that the inflationary pass-through effect of the yen's depreciation in 2025 is not significant and has, to some extent, cushioned the impact of rising U.S. tariffs. He further emphasized that exchange rates should be determined by the market.