JGB futures hit 2-year high as Nikkei pares gains

TOKYO, Jan 17 (Reuters) - Japanese government bond futures hit a two-year high on Thursday as stocks pared earlier gains and on speculation that a U.S. recession could drag on the Japanese economy, prompting the Bank of Japan to cut rates this year.

March futures 2JGBv1 rose 0.11 point to 138.32, its highest since January 2006, as the Nikkei average .N225 traded 0.15 percent higher in early afternoon trade, after ending the morning session up 1.1 percent.