Bank of Japan Governor UEDA said when underlying inflation was far below 2% ignoring upside risks did not impose large costs, but with underlying inflation now approaching 2% ignoring those risks would have significant downside effects.

2-year (TS) most-active contract up 0.02%; 5-year (TF) up 0.08%; 10-year (T) up 0.11%; 30-year (TL) up 0.29%.

Daiwa Securities chief FX strategist Kenta Tadaide said any surprise Japanese government intervention to support the yen may only be a stopgap to buy time. "To maximize the effect of FX intervention, monetary policy must remain aligned," he said, adding markets largely expect the Bank of Japan to keep policy rates unchanged at today's decision and are focused on the policy statement and Governor Kazuo Ueda's press conference.