On Tuesday, Ryozo Himino, the Deputy Governor of the Bank of Japan (BOJ), stated that the central bank will closely monitor developments in the Middle East to inform its monetary policy decisions. Himino emphasized that the BOJ is prepared to adjust its policy rate and the level of monetary accommodation in response to economic activity, inflation, and financial conditions influenced by global events. Amid rising tensions in the Middle East, there is an increasing expectation that the BOJ will raise interest rates by at least 25 basis points in June 2023. This decision is driven by concerns regarding the inflationary effects of the ongoing conflict in the region. Although consumer inflation in Japan has remained relatively stable, largely due to government subsidies on gas and electricity, there has been a notable increase in producer inflation during March and April. This trend suggests that consumer prices may soon rise as well, prompting the BOJ to take proactive measures to manage inflationary pressures.