Key facts
- Japanese government bonds were steady ahead of the Bank of Japan's monetary policy decision.
- Strong demand at a 2-year JGB auction provided support.
- US Treasuries gained after the Federal Reserve left interest rates unchanged.
- The bid-to-cover ratio at the 2-year JGB auction rose to 4.03 from 3.89.
- The Bank of Japan is expected to leave rates unchanged on Friday.
Japanese government bonds (JGBs) were steady on Thursday, with the market supported by strong demand at a 2-year note auction and gains in US Treasuries. The Federal Reserve's decision to leave interest rates unchanged and provide few signals about future hikes also boosted sentiment. Analysts believe this reduces the immediate need for the Bank of Japan to aggressively raise rates, which should support the yen bond market. The Bank of Japan is widely expected to keep its policy rates unchanged on Friday.