Japanese bonds fall as inflation concerns rise ahead of BOJ decision

By Rocky Swift

TOKYO, March 19 (Reuters) - Japanese government bonds (JGBs) fell on Thursday as investors awaited a decision by the central bank and signals for how policymakers will address inflation pressures from surging oil prices.

The benchmark 10-year JGB yield JP10YTN=JBTC rose 3.5 basis points to 2.250%. The five-year yield JP5YTN=JBTC rose 2 bps to 1.665%. Yields move inversely to bond prices.

JGB yields have been on the rise recently as the Middle East conflict pushes energy prices higher and pressures global central banks to address inflation fears.

The U.S. Federal Reserve and the Bank of Canada struck hawkish tones in their policy readouts on Wednesday. The Bank of Japan is widely expected to keep interest rates steady on Thursday at the conclusion of its two-day policy meeting, but market views on its rate path are divided.

"A major focus will be on how much caution the Bank of Japan will show regarding the risk of upward pressure on inflation, given its relatively accommodative policy stance," Ataru Okumura, a senior strategist at SMBC Nikko Securities, said in a report.