The Governor of the Bank of Japan, Mr. Haruhiko Kuroda, believes that the conflict in the Middle East brings a dual risk of inflationary pressures and economic downturn.

Haruhiko Kuroda, Governor of the Bank of Japan, said that the conflict in the Middle East poses a dual risk of rising inflation and economic downturn. The Monetary Policy Committee will decide at the end of the month meeting what is the most appropriate policy to achieve the 2% inflation target. Kuroda told reporters in Washington on Thursday, "Overall, considering the duration of war-related impacts and other economic conditions, we will choose the most appropriate response to sustain the 2% inflation target." As this may be Kuroda's last opportunity to signal policy before the Bank of Japan's interest rate decision on April 28, his comments in Washington have been closely watched. Before the previous two rate hikes, Kuroda had given clear hints to ensure that the market was prepared for the rate decision. Prior to the escalation of the conflict in the Middle East, most observers believed that the Bank of Japan would raise rates in April. However, in recent weeks, this expectation has cooled. Kuroda emphasized uncertainty in his speech on Monday, further strengthening this trend.