JGB investors bide time before Fed, BOJ policy decisions

By Kevin Buckland

TOKYO, July 30 (Reuters) - Japanese government bond yields were mostly flat on Wednesday amid sluggish trading as investors girded for monetary policy decisions from the U.S. Federal Reserve and Bank of Japan over the next 24 hours.

The 10-year JGB yield JP10YTN=JBTC was flat at 1.555% as of 0527 GMT.

The five- JP5YTN=JBTC and two-year JP2YTN=JBTC yields each edged down 0.5 basis point (bp) to 1.095% and 0.825%, respectively.

The Fed sets rates later on Wednesday, and while policymakers are widely expected to stand pat, investors will be watching closely for signs that an interest rate cut may be on the way later this year.

Similarly, the BOJ is seen keeping policy steady on Thursday, but markets will search for clues on when the central bank is likely to resume rate hikes.

The 20-year JGB yield JP20YTN=JBTC added 0.5 bp to 2.535%, while the 30-year yield JP30YTN=JBTC rose 2 bps to 3.070%.

So-called super-long JGB yields have been higher amid worries about increased fiscal stimulus after opposition parties backing debt-funded tax cuts made big gains in upper house elections this month. Fiscally hawkish Prime Minister Shigeru Ishiba is facing pressure to step down.

By contrast, benchmark 10-year JGB futures 2JGBv1 advanced 0.09 yen to 137.99, taking cues from a rally in U.S. Treasuries overnight. Bond yields move inversely to prices.