TOKYO: Yields on short maturity Japanese government bonds were flat on Tuesday as the market confirmed the Bank of Japan’s (BOJ) dovish stance from a summary of its policy meeting last month.

The 10-year JGB yield was flat at 0.85%, after falling to 0.845% earlier in the session.

The five-year yield was flat at 0.495%. BOJ policymakers discussed the need for caution over near-term interest rate hikes with some voicing concern over unstable financial markets and the US economic outlook, a summary of their September meeting showed on Tuesday.

“The market had thought more BOJ policymakers leaned toward supporting raising rates but it turned out that they were cautious about the policy shift,” Miki Den, senior Japan rate strategist at SMBC Nikko Securities said.

At the September meeting, the BOJ kept short-term rates steady at 0.25% and BOJ Governor Kazuo Ueda said the central bank could afford to spend time eyeing the fallout from global economic uncertainties, signalling it was in no rush to raise borrowing costs further.

In the previous session, the yields jumped as perceived monetary policy hawk Shigeru Ishiba won a leadership contest to become the country’s prime minister.

JGB yields fall as bets ease for near-term rate hike after dovish BOJ

On Tuesday, the two-year bonds were not traded.

The 20-year JGB yield fell 0.5 basis point (bp) to 1.66% and the 30-year JGB yield fell 1 bp to 2.055%.

The 40-year JGB yield fell 2 bps to 2.345%.