TOKYO: Japanese government bonds mostly rose on Wednesday, with the 2- and 5-year yields falling to record lows on expectations that the Bank of Japan will further ease policy at its meeting later this week.
The five-year yield fell 3.5 basis points to a record low of minus 0.380 percent.
The two-year yield also shed 3.5 basis points to a record low of minus 0.370 percent.
The 10-year JGB yield fell 3.5 basis points to minus 0.295 percent, while September 10-year futures
added 0.48 point to end at a record high of 154.00.
But the 30-year JGB yield edged up half a basis point to 0.265 percent, off an earlier low of 0.205 percent.
JGBs rose after Japan's finance ministry denied a report that it was considering issuance of 50-year bonds. The Wall Street Journal, citing unnamed people familiar with the matter, had reported earlier on Wednesday that the ministry was mulling such a plan to capitalise on ultra-low borrowing costs.
The Federal Reserve will announce its policy decision at the end of its two-day meeting later on Wednesday, while the Bank of Japan's own two-day meeting concludes on Friday. The Fed is widely expected to stand pat, while the BOJ is expected to muster some additional easing measures.
While there is near-consensus in the market that the BOJ will ease further, sharply cut its inflation forecasts and delay the timeframe for hitting its price goal, sources familiar with the bank's thinking say the decision is too close to call.
Many central bank policymakers prefer to hold off on action as they expect an anticipated fiscal stimulus package. Japanese Prime Minister Shinzo Abe said on Wednesday his government would compile a package of more than $265 billion to reflate the flagging economy, media reported, though it is unclear how much will be spent to directly boost growth.
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