The improved tone piqued demand at a sale of five-year notes, and prompted life insurance companies to seek out bargains in the recently underperforming superlong zone.

"With expectations of BOJ easing again, the strength in JGBs might continue through next week," said Tomohiro Miyasaka, an analyst at Credit Suisse in Tokyo.

Sources close to the central bank said it would consider expanding stimulus again and double its inflation target to 2 percent at its Jan. 21-22 meeting.

The 10-year JGB yield fell 1.5 basis points to 0.750 percent, its lowest since Dec. 18, moving further away from a 4-1/2-month high of 0.840 percent touched several times last week.

The benchmark 10-year JGB futures contract ended up 0.17 point at 144.31 after rising as far as 144.35, its highest since Dec. 14, fuelled by a drop in equities.