TOKYO, April 10 (Reuters) - Japanese government bonds held on to their slight gains on Tuesday after the Bank of Japan refrained from taking further monetary easing steps at its policy meeting, but was seen as likely to take them later this month.
* BOJ policymakers held policy steady as expected, and maintained its assessment the economy is showing some signs of picking up. But it also offered a cautious view on business sentiment, saying it was more or less flat.
* The yield on the latest 10-year notes was down half a basis point at 0.960 percent. That matched Monday’s intraday nadir, which was its lowest level since March 1, as investors positioned for the possibility of a surprise easing.
* Most strategists had expected the central bank to hold off from deciding on any new easing measures until at least its next meeting on April 27.
* After its April 27 meeting, the BOJ is scheduled to issue its latest economic outlook, which is likely to show that a sustained end to deflation is a long way off. That would give central bank policymakers some clear justification to take easing steps without appearing as if they are bowing to political pressure.
* Japanese politicians kept up the drumbeat of rhetoric on Tuesday for the central bank to continue to take action.
Finance Minister Jun Azumi said on Tuesday he thinks the Bank of Japan will take appropriate monetary policy steps when needed.
Economics Minister Motohisa Furukawa said on Tuesday he continues to expect the Bank of Japan to take flexible and bold measures to achieve its 1 percent inflation goal.
* When the BOJ does take further steps, strategists say it will probably again expand its 65 trillion yen asset buying and loan programme, mostly by committing to purchase more JGBs.
* The June 10-year JGB futures contract added 0.06 point to 142.38. It hit a four-week high of 142.42 on Monday.
* The yield on the 20-year bond lost 1 basis point to 1.735 percent, retracing a more than six-week low touched on Monday.
The 30-year bond yield shed 1.5 point to 1.920 percent
* The five-year yield slipped half a point to 0.295 percent.