The Bank of Japan (BOJ) left policy unchanged on Tuesday at the conclusion of its two-day policy meeting, as widely expected.
Finding profit in trading JGBs is a bit counterintuitive. Bond yields, which move inversely to prices, have plunged to record lows in the wake of the Bank of Japan's (BOJ) surprise move in late January to implement a negative interest rate policy.
Investors were met with disappointment when the central bank kept monetary policy, voting unanimously to maintain its pledge of increasing base money at an annual pace of 60 trillion yen to 70 trillion yen (USD 600-700 billion).
The Bank of Japan kicks off a two-day meeting on Monday amid some talk that it could announce some measures to curb volatility in the Japanese government bond (JGB) market.
Steve Brice, Standard Chartered Bank believes that Nikkei has been performing extremely well for an extended period, without any pause or break.
A Japanese government panel has said there is "no guarantee" that investors at home would keep financing Japan's massive public debt, saying a risk of a spike in bond yields could harm long-term growth prospects, a draft report seen by Reuters showed on Tuesday.
JGB futures were down at 0.71 point at 141.19; the 10-year-JGB yield jumped to as high as 1 percent
Nirmal Bang has come out with its report on Japanese Yen. According to the research firm, the new governor of Bank of Japan (BoJ) will deliver by enhancing asset purchase program, albeit at a slower pace; the yen valuations could be a constraint on any significant fall in Q2 2013.