The 10-year JGB yield rose 1 basis point (bp) to 0.475%. “Movement of yields shows caution for the BOJ’s tweak in the yield curve control (YCC) policy,” said Keisuke Tsuruta, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.

“It is obvious that costs for keeping the YCC policy outweighs the effect for achieving the 2% inflation target.”

At the meeting, which starts on Thursday, the BOJ is expected to keep its monetary settings and dovish policy guidance unchanged to support a fragile economic recovery and budding signs of wage growth.

But the markets remember a shock in December, when the BOJ widened the movement range around 10-year JGBs.

The 20-year JGB yield fell 2 bps to 1.110%.

The 30-year JGB yield was flat at 1.355%, and the 40-year JGB yield fell 0.5 bp to 1.545%. Yields on shorter-ended notes rose, with the two-year JGB yield edging up 0.5 bp to -0.040% and the five-year yield inching up 0.5 bp to 0.160%. Benchmark 10-year JGB futures fell 0.03 yen to 147.74.