Japan’s 10-year government bond yield slipped to around 2.96% on Friday, extending its decline into a third session as markets positioned for the Bank of Japan’s latest policy decision, with markets widely expecting an interest-rate hike. Investors will also watch for signals on further tightening as policymakers navigate rising inflation and wage growth, along with pressure from US Treasury Secretary Scott Bessent to pursue more aggressive 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, while disruptions in the Middle East added to inflation risks. Japanese bond yields also followed declines in global yields as falling oil prices helped ease concerns over inflation.