JGB futures fell in the morning Tokyo session ahead of the Bank of Japan's two-day meeting that begins today. The benchmark 10-year JGB futures dropped 0.31 yen to 127.17 yen.

Market attention is also focused on the Japanese Finance Ministry's auction today of about 2.8 trillion yen in 2-year sovereign notes. The auction comes just before the BOJ policy decision.

"With the BOJ decision due the day after the auction, we expect the market to be firmly in wait-and-see mode," says Lisa Mochizuki, junior analyst at SMBC Nikko Securities. She adds that given the meeting is unlikely to provide enough evidence for an accelerated hiking scenario, the auction should clear smoothly if yields are around 1.5%.