TOKYO: Japanese government bond prices edged down ahead of an upcoming Bank of Japan meeting amid some ebb in expectations that the central bank will further ease monetary policy.
The BOJ policy board meets on Thursday, a day after a Japanese national holiday during which the financial markets will be closed.
The central bank may cut its inflation forecast, but is expected to hold off on expanding monetary stimulus, sources have told Reuters.
The JGB market took a downgrade to Japan's credit rating by Fitch Ratings in its stride, as the decision was well anticipated.
Fitch Ratings late on Monday downgraded Japan by one notch to A after the government failed to take steps in this fiscal year's budget to offset a delay in a sales tax increase. The outlook is stable.
The benchmark 10-year yield rose half a basis point to 0.305 percent, edging away from a 2-1/2 month low of 0.280 percent struck late last week.
The two-year yield stood unchanged at -0.005 percent after Tuesday's auction of the maturity was well received by investors.
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