The IMF Executive Board supports Japan's gradual and data-dependent approach to further hikes in the short-term policy rate. Japan's commitment to a flexible exchange rate regime is endorsed by the IMF to absorb shocks and maintain price stability. The IMF highlights that the Bank of Japan's state-contingent purchases of JGBs will help mitigate excessive shifts in yields during policy transitions. Japan's Finance Minister emphasizes the importance of close communication with the BOJ on forex matters.