JGBs trade in tight range despite upward revision of Q4 GDP, BoJ policy decision in focus

The Japanese government bonds traded in a tight range on Thursday as investors await the Bank of Japan’s (BoJ) two-day monetary policy meeting, due to be concluded on March 9 will add further direction to the debt market.

The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.05 percent, the yield on the long-term 30-year note rose 1/2  basis point to 0.75 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.15 percent by 04:50 GMT.

Japan's economy expanded more than initially estimated in October-December due to an upward revision of capital expenditure and inventory data, confirming an eighth consecutive quarter of growth. The economy grew an annualised 1.6 percent in October-December, versus economists' median estimate for 0.9 percent annualised growth and the preliminary reading of a 0.5 percent expansion, Cabinet Office data showed on Thursday.

Moreover, in the latest Reuters poll found that the Bank of Japan is expected to keep its short-term interest rate at minus 0.1 percent and the 10-year government bond yield target at around zero percent when policymakers meet on March 8-9.

Meanwhile, the Nikkei 225 index traded 0.42 percent higher at 21,341.50 by 04:50 GMT, while at 04:00GMT, the FxWirePro's Hourly JPY Strength Index remained highly bearish at -119.64 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex

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