Japan’s 10-year government bond yield held above 1.6% on Friday, hovering near its highest level since 2008 as investors digested fresh inflation data. Core CPI rose 3.1% year-on-year in July 2025, easing from 3.3% in June but exceeding market expectations of 3%. The reading remained well above the Bank of Japan’s 2% target, reinforcing speculation of a policy shift. Analysts expect core inflation to stay above 3% for an extended period, bolstering bets on a possible BOJ rate hike in October. At its July meeting, the central bank lifted its inflation outlook and signaled openness to a hike before year-end. However, Governor Kazuo Ueda maintained a cautious stance, stressing that “underlying inflation” has yet to show a stable alignment with the 2% goal.