JGB yields slide after BOJ cuts economic growth forecasts

TOKYO, May 1 (Reuters) - Japan's government bonds (JGBs) rose, driving yields lower, after the nation's central bank said it became more pessimistic about the economy.

The Bank of Japan kept interest rates steady and slashed its growth forecasts on Thursday, as the hit to global demand from higher U.S. tariffs cloud the outlook for the country's fragile economic recovery.

As widely expected, the board decided to keep the BOJ's short-term policy rate unchanged at 0.5% by a unanimous vote.

The 10-year JGB yield JP10YTN=JBTC fell 3.5 basis points to 1.275%, while benchmark 10-year JGB futures 2JGBv1 rose 0.45 yen to 141.1.

The two-year JGB yield JP2YTN=JBTC fell 1 basis point to 0.66%.