JGB yields steady as BOJ holds rates as expected

TOKYO, March 19 (Reuters) - Japan's government bond (JGB) yields were little changed on Wednesday after the Bank of Japan kept short-term interest rates steady at 0.5% as investors awaited comments from the central bank chief for hints on the monetary outlook.

The decision was widely expected, with Japanese policymakers gauging how U.S. President Donald Trump's ever-changing tariff policies and the resulting rise in global trade tensions could affect Japan's export-reliant economy.

The 10-year JGB yield JP10YTN=JBTC was up 1 basis point (bp) to 1.51%, while benchmark 10-year JGB futures 2JGBv1 marginally extended declines, down 0.14 points at 138.2 yen.

The focus will be on Governor Kazuo Ueda's post-meeting briefing for clues on the timing of future rate hikes.

The BOJ's statement offered little new cues, and JGB yields are unlikely to move much if BOJ Governor Kazuo Ueda's comments stay in line with the statement, said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui Trust Asset Management.

"The only new item in the statement was the mention about trade policies, which I hope Ueda will clarify," he said.

Investors were also cautious ahead of the U.S. Federal Reserve's monetary policy decision later in the day.

Earlier this month, JGB yields rose to levels last seen more than a decade ago, with the 10-year yield briefly up as high as 1.575% as bets escalated that the BOJ would raise rates faster and higher on the back of sustained wage growth and rising prices.

However, those bets have receded somewhat amid growing fears that Trump's levies against key trade partners and reciprocal tariffs could trigger a global economic slowdown.

The two-year JGB yield JP2YTN=JBTC was up 1 bp at 0.82%, while the five-year yield JP5YTN=JBTC edged 1.5 bps higher at 1.11%.

The 20-year JGB yield JP20YTN=JBTC hovered 0.5 bp higher at 2.265%, while the 30-year JGB yield JP30YTN=JBTC was flat at 2.595%.

The 40-year JGB yield JP40YTN=JBTC ticked up 0.5 bp to 2.97%.