TOKYO, Feb 15 (Reuters) - Yields on Japanese government bonds (JGBs) fell on Thursday after data that showed the economy had unexpectedly slipped into a recession pushed back bets for an early policy shift by the Bank of Japan.
The 10-year JGB yield dropped 4 basis points (bps) to 0.715%, falling from a two-month high scaled in the previous session. The five-year yield fell 2.5 bps to 0.335%.
Gross domestic product (GDP) fell an annualised 0.4% in the October-December period after a 3.3% slump in the previous quarter, government data showed.
Many market participants had expected the central bank to end its negative rate policy by April amid rising wages and price increases.
"Today's GDP is not going to be a cue for the BOJ to tweak its policy as early as March...but at the same time the BOJ has stressed that it will monitor the outlook and in that sense these GDP figures are not going to be a decisive factor in its policy shift," said Takayuki Miyajima, senior economist at Sony Financial Group.
Yields were also tracking U.S. Treasury yields lower overnight.
The benchmark 10-year U.S. Treasury note yield eased after a surge in the prior session, following comments from a Federal Reserve official about the timing of possible interest rate cuts.
Chicago Fed President Austan Goolsbee said the Fed's path back to its 2% inflation target rate would still be on track even if price increases run a bit hotter than expected over the next few months.
The 20-year JGB yield fell 3 bps to 1.495%.
The 30-year JGB yield dropped 2 bps to 1.785%
The two-year JGB yield slipped 1 bp to 0.130%.
Benchmark 10-year JGB futures rose 0.46 yen to 146.4.
(Reporting by Junko Fujita; Editing by Edwina Gibbs)
