Japanese bonds steady in subdued trade

The Japanese government bonds traded nearly flat on Tuesday, succumbing to thin trading activity during a relatively quiet session that saw little data of much significance. Also, markets in Japan were shut on Monday for a public holiday.

The yield on the benchmark 10-year bonds, which moves inversely to its price hovered around -0.228 percent mark and the short-term 2-year JGB yield rose nearly 1 basis point to -0.323 percent by 06:30 GMT.

Moreover, expectations of new stimulus in Japan from the government to revive economy lowered demand for safe-haven assets. The Japan's upper house election over the weekend concluded with a win for Prime Minister Shinzō Abe and his coalition partners.

The Japanese PM Abe also confirmed that he will instruct economy minister Nobuteru Ishihara to compile economy stimulus package and ask to implement economic measures to support domestic demand.

According to Reuters, results of today's JGB buying operations, which the BoJ published around noon, were largely in line with market expectations in terms of the accepted yields and the bid-to-cover ratio in the 5 to 10-year zone for 430 billion yen.

Meanwhile, the benchmark Nikkei 225 index closed up +1.37 percent at 16,723.31, and the broader Topix index closed 1.08 percent higher to 1,331.39 points.