TOKYO, March 6 (Reuters) - Yields on Japanese government bonds (JGBs) were mostly flat on Monday despite declines in U.S. Treasury yields in the previous session, as the Bank of Japan (BOJ) is seen keeping its policy unchanged this week.
The 10-year JGB yield was flat at 0.500%, the top end of the Bank of Japan's policy band. The 20-year JGB yield was flat at 1.230%.
"Yields on Japanese government bonds (JGBs) did not react to declines in U.S. interest rates," said Kazuhiko Sano, chief fixed income strategist at Tokai Tokyo Securities.
U.S. Treasury yields slipped on Friday after hitting new highs in the week as they met resistance following comments from Federal Reserve officials that temporarily calmed fears around the direction of inflation and interest rates.
The JGB market was flat ahead of the BOJ's two-day policy meeting later in the week, where it bank is set to maintain ultra-low interest rates, including a controversial bond yield cap.
The central bank is currently awaiting a leadership transition that could eventually end outgoing chief Haruhiko Kuroda's massive monetary stimulus.
Market participants say some remain cautious over the risk of a possible policy tweak. The BOJ jolted markets in December when it unexpectedly widened the allowed trading band for 10-year bond yields to between -50 and +50 basis points (bps).
The 30-year JGB yield fell 0.5 bps to 1.410% on Monday, ahead of an auction for 30-year debt in the next session.
The 40-year bonds have not been traded as of 0630 GMT and the yield was at 1.605%. The two-year JGBs have not been traded as well, and the yield was flat at -0.045%.
The five-year yield rose 2 bps to 0.210%, its highest level since Feb. 28.
Benchmark 10-year JGB futures fell 0.08 yen to 146.81. (Reporting by Junko Fujita; Editing by Janane Venkatraman)
