JGBs edged lower in early Tokyo trading as markets await the BOJ’s rate decision today. With the central bank expected to hold rates steady, the focus shifts to forward guidance, says Yuxuan Tang, Asia Head of Rates & FX Strategy at J.P. Morgan Private Bank. He notes that markets currently price only one additional full rate hike by year‑end, and that the BOJ’s inflation and economic activity mandates leave limited room for materially tighter policy.

The 10‑year JGB yield moved up 0.5 bps to 2.800%, reflecting the modest shift in expectations. Traders are closely watching the BOJ’s policy statement for any subtle cues on future tightening or easing, as the bank’s dual mandate continues to steer market sentiment.

In Tokyo’s early session, investors weighed the BOJ’s stance on inflation and fiscal stimulus, with bond prices adjusting accordingly. The muted change in yields underscores market confidence in the bank’s commitment to its inflation target while leaving room for a cautious approach to future policy shifts.