April 30, 2014 6:19 pm JST

JGBs flat amid lackluster market as BOJ bond-buying keeps traders away

TOKYO (Dow Jones) -- Trading of Japanese government bonds remained lackluster Wednesday, as the Bank of Japan's massive bond-buying program kept traders away from active trading.

     At a policy meeting earlier in the day, the central bank decided to keep its policy unchanged, while also releasing its semi-annual economic outlook report.

     The report showed the board member's median view of the core consumer price index rising 2.1% in the fiscal year starting in April 2016, causing central bank watchers to conclude the BOJ is bullish on the economy.

     Strategists say the outlook report alone will drastically cut market expectations for additional easing.

     But Gov. Haruhiko Kuroda, who is mindful of market reactions, will likely support easing expectations by mentioning the economy's downside risks at a news conference later in the day. Stocks and currencies will likely be sensitive to Mr. Kuroda's comments.

     Still, bond traders will likely remain on the sidelines even after the news conference. Mizuho Securities market strategist Teruyoshi Sotome said he was focusing on the central bank's views on the market's recent lack of momentum, and whether the central bank will do anything about it.