Japan will consider measures to soften the economic impact of rising fuel costs caused by the Middle East conflict, including steps to restrain gasoline prices, Prime Minister Sanae Takaichi said on Monday.

Her remarks highlighted the government’s concern that the conflict could drag on and weigh on the economy, which is particularly sensitive to fluctuations in fuel prices due to its heavy reliance on imports.

The situation in the Middle East is also expected to complicate the Bank of Japan’s decision on how soon to raise interest rates, as the conflict could slow economic growth while adding to inflationary pressures.

If the Bank of Japan refrains from raising rates in March, such a move could support the USD/JPY pair by putting pressure on the Japanese yen.