TOKYO, April 25 (Reuters) - Japanese government bond (JGB) yields struggled for a clear direction on Thursday, as investors awaited more clues on the interest rate paths of both the Federal Reserve and the Bank of Japan (BOJ) ahead of key U.S. economic data and the BOJ's policy decision.
The 10-year JGB yield rose 0.5 basis point (bp) to 0.890%, sitting at its highest since Nov. 13, as the BOJ began its two-day policy meeting.
Although the BOJ is expected to stand pat at its April meeting, it is likely to project that inflation will stay around its 2% target for the next three years in new forecasts.
The yen's slide to fresh 34-year lows, however, may force BOJ Governor Kazuo Ueda to walk a delicate line in guiding monetary policy.
The Japanese currency hit a new 34-year low of 155.45 against the U.S. dollar on Thursday, sparking fresh concerns as to whether Tokyo will intervene.
With the two-year JGB yield, which is highly sensitive to the BOJ's policy, already up near 0.3%, the market has probably already priced in another rate hike in July, Makoto Suzuki, a senior bond strategist at Okasan Securities said.
"But if there is any change in the U.S. economy in those three months, that could change, so essentially we are just watching the U.S. economy," he added.
The two-year JGB yield fell 0.5 bp to 0.295% on Thursday, after touching 0.3%, its highest level since July 2009, earlier this week.
Attention will also be on U.S. first quarter gross domestic product data, due later on Thursday, and personal consumption expenditures for March due on Friday.
Elsewhere on the short-end, the five-year yield ticked up 0.5 bp to 0.495%.
The 20-year JGB yield was 0.5 bp lower at 1.650%, while the 30-year JGB yield fell 1.5 bps to 1.935%.
The 40-year JGB yield slid 2 bps to 2.275%. (Reporting by Brigid Riley; Editing by Mrigank Dhaniwala)
