Jepp Terminal 5.3.1 says:
Prior to passing the IAF, pilots are required to set either:
a)the actual aerodrome QNH from an approved source, or
b)the forcast Terminal QNH, or
c)the forecast area QNH.
A METAR is a routine report by an approved observer or an AWS of actual conditions.
Thus it comes under part a) of above clause.
You can't use it for the lower minimas because it doesn't meet the validity requirements that other actual reports do, ie awib, atis etc. ]
METARS are published every 1/2 hour and hour depending, therefore they don't give the actual conditions say 10 mins after being published.