TOKYO, March 6 (Reuters) - Japanese government bond yields edged higher on Wednesday, led by shorter-dated notes, as investors positioned for the possibility of an exit from the Bank of Japan's negative interest rate policy this month.
Speculation of a rate hike at the BOJ's March 18-19 meeting rose last week after board member Hajime Takata said an overhaul of the central bank's ultra-loose monetary policy is necessary amid heightened prospects for achieving the 2% inflation target.
Core inflation in Japan's capital re-accelerated in February above the central bank's 2% target, data showed on Tuesday.
The two-year JGB yield was 1 basis point (bp) higher from Tuesday at 0.18% as of 0435 GMT.
The yield hit a near 13-year high of 0.19% on Friday, before pulling back slightly at the start of this week. In mid-January, it was at -0.05%.
"A lot of people are now starting to think about March as a real possibility, instead of just a risk, and that's got the front end under pressure," said Barclays strategist Shinichiro Kadota.
"Two's should continue to underperform on the curve as we approach the March meeting."
Bond yields rise when prices fall.
The five-year yield rose 1.5 bps to 0.37%, while the 10-year yield was up 1 bp at 0.71%.
The 20-year yield added 0.5 bp to 1.46%, while the 30-year yield was flat at 1.76%. (Reporting by Kevin Buckland; Editing by Varun H K)
