Japan’s 10-year government bonds rose the most in three weeks after the nation’s central bank today said it will bring forward next month’s meeting, fueling speculation it will announce additional easing measures. Ten-year bonds snapped a five-day drop as the Bank of Japan, which left borrowing costs on hold today, said it will meet again after a Federal Reserve gathering on policy next week. Bonds also advanced before reports tomorrow forecast to show consumer prices and industrial output dropped. “The BOJ is holding the next meeting earlier and will be ready to take action after markets react to the Fed’s action,” said Takeshi Minami, chief economist at Norinchukin Research Institute Co. in Tokyo. “Investors still have an appetite for bonds, especially short-term notes.” The yield on the 0.8 percent bond due September 2020 fell five basis points to 0.905 percent as of 3:07 p.m. in Tokyo at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The price rose 0.448 yen to 99.047 yen. Five-year yields dropped two basis points to 0.275 percent. Ten-year bond futures for December delivery gained 0.33 to 143.51 as of the afternoon close at the Tokyo Stock Exchange. Ten-year yields earlier touched 0.97 percent, the highest since Sept. 28. A basis point is 0.01 percentage point. BOJ Easing Fed policy makers, who already cut interest rates almost to zero and bought $1.7 trillion of securities, are considering additional asset purchases to flood markets with cheap money to stoke inflation. The Fed may announce a new round of so-called quantitative easing measures at its next meeting on Nov. 2-3. The BOJ will buy BBB rated corporate bonds and A-2 commercial paper, the bank said in a statement released today in Tokyo. The central bank had only accepted bonds rated A or higher and a-1 commercial paper when it was buying corporate debt in 2009 in the wake of the global credit crisis. Board members moved their next meeting to Nov. 4-5 from Nov. 15-16 and plan to discuss how the bank will purchase exchange-rated funds and real-estate investment trusts. The bank maintained its benchmark overnight call rate at between zero percent and 0.1 percent, as forecast by economists surveyed by Bloomberg News. It also kept the amounts of its 5 trillion-yen asset buying program and 30 trillion-yen credit facility unchanged. “It’s hard to imagine Japan’s long-term yields will rise sharply when you think about the nation’s economic outlook and current BOJ policy,” said Satoshi Yamada, who helps oversee about $12 billion as manager of fixed-income trading at Okasan Asset Management Co. in Tokyo. “I expect people to buy on dips at current yield levels.” Falling Prices Consumer prices excluding fresh food slid 1 percent in September from a year earlier, according to a Bloomberg survey before tomorrow’s report. Falling prices in the economy enhance the value of debt’s fixed payments. Industrial production dropped 0.6 percent in September, a separate survey showed. The BOJ today said consumer prices in the 2011 fiscal year will rise 0.1 percent from the previous 12 months, the same as its previous forecast in July. To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net. To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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