TOKYO: Japanese government bond yields fell on Thursday as investors continued to buy bonds amid fading expectations for a Bank of Japan (BOJ) policy tweak.

The 10-year JGB yield fell 2 basis points (bps) to 0.595% and the 20-year JGB yield fell 2 bps to 1.310%, its lowest since Dec. 21.

“Investors who waited to buy bonds have been buying them as expectations for the Bank of Japan to exit from the negative rate policy at an early stage receded,” said Keisuke Tsuruta, fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.

“This is an ongoing move since the beginning of this month. Those investors do not want to miss opportunities to earn cash from coupons.”

The powerful earthquake that hit the western Japan coast on New Year’s Day cast a shadow on the economic outlook, raising expectations that the BOJ would not hurry in normalizing its policy.

Investors bought JGBs also on expectations that a jump in Japanese stocks would prompt pension funds to adjust their portfolios and buy JGBs, said Tsuruta.

JGB yields fall as softer Tokyo CPI signals no urgency to hike rates

Japan’s Nikkei share average crossed the 35,000 level for the first time in 34 years on Thursday.

The 30-year JGB yield fell 0.5 bp to 1.580%.

The two-year JGB yield and the five-year yield fell 1 bp each, to 0.010% and 0.180%, respectively.