Benchmark 10-year JGB futures rose as much as 0.37 point to 146.67.
"From what he has said so far, it sounds like he is a dove," said Takafumi Yamawaki, head of Japan rates research at J.P. Morgan Securities. "I don't think Ueda has the same stance as Kuroda but it is not clear whether Ueda would tweak the BOJ policy as the market expected. This could be a risk for short sellers, which is why futures rose today." Upon approval by parliament, Ueda is expected to succeed incumbent Haruhiko Kuroda when his term ends in April.
In the run up to the end of Kuroda's term, investors renewed their attack on the BOJ's ultra-loose interest rate stance, sending yields on five-and 10-year bond yields to more than one-month high in the previous session.
Tetsufumi Yamakawa, chief economist at Barclays Securities, said in a research note the market might not have to change its expectations about the monetary policy direction, because Ueda refrained from giving clear responses about near-term policy, including revision of the yield curve control.
"We retain our outlook for the BOJ to reach a decision at the April monetary policy meeting to start revising YCC with consideration to its side effects."
The five-year yield fell 2 basis points to 0.220%.
The 10-year JGBs have not traded yet and the yield was flat at 0.500%, after breaching the top end of the BOJ's policy band for a second day in the previous session. (Reporting by Junko Fujita; Editing by Subhranshu Sahu and Rashmi Aich)
