TOKYO, Sept 22 (Reuters) - Japanese government bond yields were mostly flat in early trade on Friday as investors looked forward to the Bank of Japan (BOJ) chief's comments for signs of a policy shift, while rising U.S. Treasury yields weighed on sentiment.
After the two-day policy meeting ending on Friday, the BOJ is widely expected to maintain its short-term interest rate target of -0.1% and that for the 10-year bond yield around 0%.
But with rising raw material costs keeping inflation above the 2% target for more than a year, BOJ Governor Kazuo Ueda is under pressure to shift away from the massive stimulus of the past decade.
"Investors are awaiting the BOJ governor's comments for clues on when the central bank plans to end its negative rate policy," said Hiroshi Namioka, chief strategist and fund manager, T&D Asset Management. "The outcome of the BOJ policy meeting could ease sentiment, but the rising U.S. yields will remain a huge upward pressure on Japanese bond yields."
The 10-year JGB yield was flat at 0.745%, its highest level since September 2013. The five-year yield was flat at 0.305%.
Benchmark 10-year U.S. Treasury yields rose to 16-year highs on Thursday, a day after the Federal Reserve surprised investors by flagging the potential for an additional rate hike and an expectation for fewer cuts next year.
The two-year JGB yield was flat at 0.030%.
The 30-year JGB yield rose 0.5 bp to 1.690%.
The 40-year JGB yield rose 0.5 bp to 1.830%.
(Reporting by Junko Fujita; Editing by Subhranshu Sahu)
