TOKYO, March 2 (Reuters) - Japanese government bond prices fell on Monday as domestic share prices bounced back after a statement from Bank of Japan Governor Haruhiko Kuroda raised hopes of a globally coordinated action to support financial markets.
Kuroda said the central bank would take necessary steps to stabilise markets jolted by the coronavirus outbreak, issuing a statement for the first time since July 2015, when a debt crisis in Europe shook investor confidence.
Following Federal Reserve Chair Jerome Powell's comments on Friday that the U.S. Fed would "act as appropriate" to support the economy, Kuroda's statement lifted investors' mood that has been dampened by the globally spreading coronavirus epidemic.
Although JGBs had initially gained on Kuroda's statement, a subsequent rise in stock prices put a dent to the rally in bond prices.
Benchmark 10-year JGB futures fell 0.19 point to 153.88, after having risen to a four-month high of 154.38 earlier in the session.
The 10-year cash JGB yield rose 2.0 basis points to minus 0.140%, reversing its course after hitting a four-month low of minus 0.180%.
The 20-year JGB yield was flat at 0.150% while the 30-year yield also stood flat at 0.280%, both bouncing off six-month highs hit earlier.
The five-year yield rose 1.0 basis point to minus 0.265%.
At the shorter end of the market, benchmark three-month interest rate futures briefly shot up to a record high of 100.09, as Kuroda's statement spurred expectations of further easing.
In addition, the BOJ conducted a reverse bond repo to supply 500 billion yen of liquidity, the first time in almost four years.
But analysts also noted the BOJ's statement merely suggested additional measures on market operation and asset purchase.
"The BOJ's statement is not a prior notice of monetary easing," said Takahide Kiuchi, former BOJ policy board member and executive economist at Nomura Research Institute.
"What it says will do as appropriate is not cuts in policy rates. It only talks about market operations and asset purchases," he said.
Market partcipants have said cutting negative interest rates could backfire as the policy has been weakening many banks. (Reporting by Tokyo markets team; Editing by Vinay Dwivedi)