The newly issued 10-year Japanese government bond yield fell 0.010% from the previous day to 2.880% on the morning of the 26th, although the decline in long-term yields moderated. Lower crude oil futures prices eased concerns that inflationary pressures in Japan would intensify, supporting demand for Japanese government bonds. Position-adjustment selling, including profit-taking, limited the market’s gains as investors adopted a wait-and-see stance before a speech by Bank of Japan Deputy Governor Ryozo Himino scheduled for the 27th. Japan’s yield curve is gradually flattening: intermediate-maturity yields, which are more sensitive to monetary policy, have risen relatively sharply amid expectations of an early Bank of Japan rate hike, while super-long yields have increased more modestly. This contrasts with curve steepening in the U.S. and U.K. since the end of June, where fiscal expansion concerns and persistent inflation have pushed super-long yields higher. Data from interdealer broker Tullett Prebon show the narrowing spread between Japan’s intermediate and super-long maturities. Investors are also weighing whether current yields already reflect the Bank of Japan’s policy-rate outlook.