Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The Japanese government bonds slumped on Tuesday as demand for the 10-year JGBs fell at an auction held today after the Bank of Japan disappointed investors by keeping its key policy rate unchanged along with no additional bonds buying programme.
The benchmark 10-year bond yield, which moves inversely to its price, rose 9 basis points to -0.042 percent, the yield on 5-year note also jumped 9 basis points to -0.133 percent, the yield on super long 30-year note bounced 3 basis points to 0.334 percent and the short-term 2-year JGB yield climbed 8 basis points to -0.153 percent by 07:10 GMT.
The Bank of Japan in its two-day monetary policy meeting, which concluded on Friday, surprised markets by keeping its key interest rate unchanged at prevailing minus 0.1 percent. Also, the central bank kept its base money target at 80 trillion yen.
However, the BoJ announced to increase to increase ETF purchases at an annual pace of 6 trillion yen, up from the current 3.3 trillion yen. This decision was supported by 7-2 votes as board member Takahide Kiuchi and Takehiro Sato opposed the majority decision.
In addition, the central bank in its statement proposed to increase size of lending programme that provides dollar funding to Japanese financial institutions and conduct comprehensive assessment of effects of QQE with negative rate policy at next rate review. They further added that the governor Haruhiko Kuroda as chairman of board instructed staff to prepare deliberations on assessment at BOJ's next meeting.
According to Reuters, many bond investors are expecting that the BOJ's bond buying - of 110-120 trillion yen a year - will hit a limit as there is a dwindling pool of JGBs investors eager to sell to the BOJ.
According to Japan Center for Economic Research report, Japan is expected to witness 1.3 percent GDP boost in a few years from the new stimulus plan as Prime Minister Shinzo Abe is preparing a 28 trillion yen stimulus package in a bid to reboot Abenomics. In addition to the stimulus plan, last week the BoJ decided to ramp up its purchase of exchange-traded funds to 6 trillion yen (USD58.24 billion), almost double the 3.3 trillion yen it buys now.
According to reports from Nikkei, Japan June gross domestic product rose 1 percent, compared to that in May. The Q1 GDP rose by a seasonally adjusted 0.4 percent. On an annualized basis, it was 1.7 percent which offset the Q4 -1.7 percent decline. This 1 percent gain for the month would represent a healthy increase.
Lastly, Japanese Prime Minister Finance Minister Taro Aso and Haruhiko Kuroda to hold an emergency meeting today to confirm co-operation over policy.
Meanwhile, the benchmark Nikkei 225 closed down -1.47 percent at 16,391.45 and the broader Topix index closed marginally lower 1.64 percent to 1,300.20 points.
