The Japanese yen weakened past 156 per dollar on Friday, hovering near two-week lows as investors awaited the latest Bank of Japan policy decision, with markets widely expecting an interest-rate hike. Investors will also seek guidance on the potential for further tightening as policymakers contend with rising inflation and wages, alongside pressure from US Treasury Secretary Scott Bessent for a more aggressive pace of rate increases. Meanwhile, Japan’s core inflation eased to 1.7% in August from 1.8% in July, marking its first slowdown in four months. However, expectations that price pressures could strengthen in the coming months continued to support a hawkish BOJ outlook, with disruptions stemming from the Middle East adding to inflation risks. Earlier this month, the yen climbed to seven-month highs on expectations of more aggressive BOJ tightening, recent joint interventions by Tokyo and Washington, and prospects of greater capital repatriation by Japanese investors.