Japan's Nikkei gains, JGB futures rise ahead of expected BOJ rate hike
TOKYO, Dec 19 (Reuters) - Japan's Nikkei share average advanced on Friday and Japanese government bond futures rose ahead of a Bank of Japan policy decision, with markets widely expecting an interest rate hike later in the day.
The Nikkei .N225 gained 0.6% to 49,306.95, as of 0014 GMT, and earlier jumped as much as 1%.
That followed a 1% drop in the previous session, when the index sank to a 3 1/2-week low.
The broader Topix .TOPX added 0.6% to 3,376.67.
Benchmark 10-year JGB futures 2JGBv1 added 0.09 yen to 133.43 yen. Cash bonds had yet to trade.
The BOJ decision does not come at a set time, but is generally between 0330-0500 GMT. BOJ Governor Kazuo Ueda will hold a news conference from 0630 GMT.
A large majority of economists in a Reuters poll predicted the central bank BOJ will raise short-term interest rates to 0.75% from 0.5%, which would mark the first increase since January.
"Economic conditions arguably justified a hike ahead of the monetary committee's October meeting, and recent data only strengthens the case," James Brady, vice president at Teneo, said in a note.
"The Bank's long-sought 'virtuous cycle' of wage growth and 2% inflation now appears closer than at any point in decades."
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