(Updates with closing prices, BOJ decision)
TOKYO, March 16 Japanese government bonds firmed
on Thursday after the Bank of Japan kept monetary policy steady,
with JGBs tracking gains in U.S. Treasuries when the Federal
Reserve hiked interest rates as expected but did not signal any
changes to its outlook.
The 10-year JGB futures contract rose to its session high
of 150.20 after the BOJ decision, and ended up 0.26
points at 150.17.
The BOJ maintained its short-term interest rate target of
minus 0.1 and its pledge to guide the 10-year government bond
yield at around zero percent. It also kept intact a loose pledge
to maintain the pace of its annual increase in JGB holdings at
80 trillion yen ($706 billion).
The benchmark 10-year JGB yield fell 1.5 basis point (bp) to
In the superlong zone, the yield on 20-year JGBs
fell 2 bps to 0.645 percent, while the 30-year
JGB yield shed 2.5 bps to 0.835 percent.
On Wednesday, U.S. two- and three-year yields fell from
multi-year highs after the Fed delivered its second interest
rate hike in three months, and said further rate increases would
only be "gradual," with officials sticking to their outlook for
two more rate hikes this year and three more in 2018.
"The Fed's outlook was more dovish that some had
anticipated," said Tadashi Matsukawa, head of fixed income
investment in Tokyo at PineBridge Investments.
BOJ Governor Haruhiko Kuroda will hold a post-meeting
briefing at 0630 GMT.
(Reporting by Tokyo markets team; Editing by Sherry