Markets are now waiting to see the outcome of a sale of up to 8.5 billion euros of Italian bonds on Thursday. Italy faces around 100 billion euros in bond redemptions and coupon payments between January and April.
March 10-year JGB futures were up 0.09 point at 142.26, but face strong resistance from the bottom of the daily Ichimoku cloud at 142.56.
"Activity tends to be subdued from Christmas to new year holidays ... Rangebound looking charts are making it even harder for players to move," said a trader at a US brokerage in Tokyo.
The 10-year cash bond yield was down 0.5 basis point at 0.990 percent, off a two-week high of 0.995 percent hit on Wednesday, but keeping above a three-week low of 0.965 percent marked last week. The five-year yield was flat at 0.350 percent.
Players expected the euro zone's debt woes to underpin demand for JGBs, helping to counter fears that the uncertain outlook for a sales tax hike in Japan could spur yield rises.
The yield curve bear-steepened on Wednesday as yield rises in superlongs such as 20- and 30-year bonds outpaced those of other sectors, with debate on the sales tax increase denting investor appetite for longer maturities.
The government is trying to flesh out its sales tax hike proposal by the end of the year, but Prime Minister Yoshihiko Noda, a fiscal hawk who took office in September, has indicated that his self-imposed deadline might slip since a party tax panel was having trouble reaching a consensus.
Some market players expect low volume could exaggerate market moves and lead to volatility, though many see yields staying rangebound as most investors have finished adjusting their positions ahead of the New Year holiday.
"There will be some kind of tax hike proposal coming out today, and people are focusing on this but it is hard for players to take positions just on this factor," the trader said.
"If yields go lower, such as by 1.7 percent on 20-year bonds, profit-takers will emerge. So the market will likely stay rangebound."
Japan's leading share index fell 0.9 percent on Thursday.