By Ron Harui Oct. 31 (Bloomberg) -- Japanese government bond futures fell after the Bank of Japan lowered its benchmark interest rate to 0.3 percent from 0.5 percent, a smaller reduction than economists were expecting. Ten-year futures ended two days of gains after Governor Masaaki Shirakawa made the casting decision after a 4-4 vote to reduce the key overnight lending rate. Fifteen of 17 economists surveyed by Bloomberg forecast a cut to 0.25 percent. ``Shirakawa had to cast the deciding vote in a split decision, which shows some within the BOJ opposed the rate cut,'' said Akitsugu Bandou, a senior strategist at Okasan Securities Co. in Tokyo. ``This means another rate reduction may be difficult and bond players could be disappointed, leading to some selling.'' Ten-year bond futures for December delivery declined 0.30 to 137.61 at 2:40 p.m. on the Tokyo Stock Exchange. The yield on the benchmark 10-year bond fell 1.5 basis points to 1.475 percent at Japan Bond Trading Co., the nation's largest interdealer debt broker. The price of the 1.5 percent security due September 2018 gained 0.129 yen to 100.215. The yield rose as high as 1.52 percent after the rate decision was announced. A basis point is 0.01 percentage point. To contact the reporter on this story: Ron Harui in Singapore at rharui@bloomberg.net.

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