Investors remained cautious ahead of the Bank of Japan's monetary policy decision on Friday, with markets widely expecting the central bank to maintain its current interest rates.
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According to Reuters, the US Treasury market strengthened after the Federal Reserve's latest decision offered few indications that it would raise interest rates at its next meeting in December. The move provided support to Japanese government bonds by easing concerns about a more aggressive tightening of monetary policy.
The benchmark two-year Japanese government bond yield fell 0.5 basis point to 1.895%, reversing an earlier modest increase following the auction results. Bond yields move inversely to prices.
Demand at the two-year bond auction strengthened, with the bid-to-cover ratio rising to 4.03 from 3.89 at the previous month's sale, indicating improved investor appetite for Japanese government debt.
Other maturities were mixed. The 10-year JGB yield edged up 0.5 basis point to 2.83%, while the five-year yield remained unchanged at 2.265%. The 30-year yield rose 0.5 basis point to 3.88%. The…