Japanese government bond prices fall, market focus shifts to Japan's supplementary budget and the Bank of Japan.

The prices of Japanese government bonds fell on Tuesday, giving back previous gains, as investors await details of the supplementary budget plan from the government and policy decisions from the Bank of Japan. The benchmark 10-year JGB yield rose from an intraday low of 2.710% to 2.785%, an increase of 4.5 basis points. The 5-year yield rose from an intraday low of 1.985% to 2.010%, a rise of 2.5 basis points. Masahito Sugawara, senior strategist at Daiwa Securities, said, "The strong results of the previous day's 5-year bond auction boosted investors' willingness to buy back bonds, leading to a narrowing of yield spreads on Monday, a trend that has continued into this morning." He added, "The decline in yields is only temporary, as investors are only buying bonds to cover short positions."