TOKYO: Japanese government bonds mostly edged down on Thursday as investors awaited the outcome of the Bank of Japan's two-day meeting that began this session, though a solid sale of 2-year JGBs limited losses.
The Ministry of Finance offered 2.5 trillion yen ($21.08 billion) of 2-year notes with a 0.100 percent coupon, matching that of the current issue.
The sale produced a lowest accepted price of 100.23. The bid-to-cover ratio, a gauge of demand, improved to 4.84 from 4.72 at last month's sale, while the tail between the average and lowest accepted prices remained a narrow 0.008.
BOJ policymakers would prefer to hold back additional monetary easing at their meeting on Friday, according to people familiar with the central bank's thinking, though some believe that recently volatile global markets and falling inflation expectations due to cheaper oil might prompt the BOJ to act.
On Wednesday, the U.S. Federal Reserve held interest rates steady as expected, and said the U.S. economy was still on track for moderate growth and a stronger labour market even with "gradual" rate increases.
The benchmark 10-year yield added 1.5 basis points to 0.225 percent, while March 10-year JGB futures shed 0.05 point to end at 149.53.
In the superlong zone, the 30-year JGB yield rose 2.5 basis points to 1.170 percent, a day after dropping as low as 1.140 percent, which had been its lowest in a year.
The yield on the 2-year JGB, which has been trading in negative territory since late last year, inched down half a basis point after the solid sale, to a two-week low of -0.035 percent.
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