The Bank of Japan is set to keep monetary policy steady on Friday, but signal its confidence that solid wage growth and consumption will allow the central bank to raise interest rates again in coming months.

Bank of Japan Governor Kazuo Ueda faces the delicate task this week of making sure investors are firmly aware of interest rate hikes to come without ruffling markets even as he stands pat on policy.

Japanese government bond (JGB) yields dipped on Wednesday as expectations for a Bank of Japan rate hike faded, while strong results of the BOJ’s bond-buying operation lifted market sentiment. The 10-year JGB yield fell 0.

Japan's ruling party leadership race, which will determine who becomes next prime minister, could complicate the central bank's plan to normalise ultra-loose monetary policy. Here are some details on how the outcome of the LDP leadership election,