The benchmark 10-year JGB yield fell to as low as minus 0.200%, which had been perceived to be the lower end of the Bank of Japan's policy target.

Still, as top central bank officials, including Governor Haruhiko Kuroda and his deputy Masayoshi Amamiya, have recently indicated that the BOJ would be flexible about its policy, many market players think it is a matter of time before the yield falls below that level.

Expectations are rising that the BOJ will have to adopt some sort of stimulus at its policy meeting next month as U.S. President Donald Trump's latest tariffs look set to undermine the Japanese economy.

"The Fed's monetary policy has been hijacked by Trump's tariff policy. And that in turn, is putting pressure on other central banks to ease their policies," said Izuru Kato, chief economist at Totan Research Institute.

"It's still too early to say what the BOJ will do given the next policy meeting is a month and a half away. But if the Fed and the European Central Bank take easing steps in September, the BOJ will face pressure too."

Benchmark 10-year JGB futures rose as much as 0.36 point to a record high of 154.26 and was last up 0.26 point at 154.16.

The 20-year JGB yield fell 3 basis points to 0.150%, while the 30-year JGB yield declined 4 bps to 0.285%.

The 10-year JGB yield was last down 2.5 bps at minus 0.195%.

In Asian trade, U.S. bond yields plunged, with the 10-year notes' yield falling 8.5 bps in Asia to 1.770%, after it posted its biggest weekly fall in seven years last week, of 23 bps.

Fed funds futures prices have jumped, with the April 2020 contract rising 0.09 point to 98.61, reflecting expectations for the Fed to cut rates by a total of 0.75 bps by then.

Front-end contracts  are fully pricing in a 25 bp cut in September and starting to price in about 20% chance of a larger 50 bp cut.