The move - which increased the BoJ's asset purchase programme by 10 trillion yen ($127 billion) to 80 trillion yen - came just days after the US Federal Reserve pledged to pump $40 billion a month into the economy until the jobs market improved (QE3). It also follows new plans from the European Central Bank to fight the region's debt crisis
These separate attempts to stimulate the global economy and ease the euro zone debt crisis have prompted rallies in more risky assets at the expense of safe-haven government bonds, although some of the market moves have been reversed.
"Japan has put the pressure on Treasuries but we're trying to bounce a bit, it looks like it was a bit of knee-jerk reaction," a trader said. "There's still a bit of a flight-to-quality bid out there."
Benchmark 10-year Treasury yields were a basis point lower at 1.80 percent, with T-note futures 1/32 lower at 133-13/32.
The 10-year yield has dropped back below its 200 day moving average after just two trading sessions and Societe Generale noted the last time yields failed to break above it, they then fell by almost 30 basis points. "The sobering assessment after the QE3 party may be that much of the initial market reaction could partially be reversed in the days and weeks to come," the bank's strategists said in a note.
But the trader said although he expected a short-term rally, there was a risk 10-year yields would still try to test the 2.0 percent level. "That's still a risk, if we break above the moving average convincingly then you're looking at two percent and above. I still think we'll rally a bit here but we're keeping a tight stop," he said, referring to the price levels traders set to exit a position when the market is moving against them.