The International Monetary Fund said Monday that the Bank of Japan should proceed with further hikes in its short-term policy rate at a “gradual pace,” after the bank raised interest rates in March for the first time in 17 years. The Washington-based body said its executive directors agreed that purchases of Japanese government bonds by the BOJ “will help mitigate excessive shifts in yields that could undermine macro-financial stability during this historic policy transition.” The statement, released following the conclusion of a regular bilateral consultation with Japan on May 6, also underli…