Japan's shorter-dated bond yields slip as oil prices fall and cool inflation concerns

TOKYO, July 27 (Reuters) - Shorter-dated Japanese government bond yields fell on Monday, tracking a sharp drop in oil prices as a pause in U.S. attacks on Iran fuelled hopes for a diplomatic off-ramp and eased inflation fears.

Here are a few details:

• The two-year yield JP2YTN=JBTC, which is most sensitive to the Bank of Japan's policy rates, decreased 2.5 basis points (bps) to 1.495%. The five-year yield JP5YTN=JBTC fell 4.5 bps to 2.000%. Yields move inversely to bond prices.
• Oil prices fell more than 5% after U.S. President Donald Trump paused strikes on Iran after two weeks of attacks. Iran will halt its own attacks as long as the U.S. does the same, a senior Iranian official told Reuters on Sunday. O/R
• "With excessive tensions easing over the weekend, the market is expected to regain some calm for now," said Keisuke Tsuruta, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities, in a note.
• Other tenors were yet to be traded as of 0200 GMT.
• The Bank of Japan will hold a policy meeting, in tandem with the Federal Reserve and the Bank of England this week. The BOJ is likely to keep interest rates steady at 1% and maintain its warning over the risk of inflation overshooting its 2% target at a two-day meeting ending on Friday.
• The BOJ "won't necessarily raise rates (this week), but might signal that they could be more activist," said Sally Auld, chief economist at National Australia Bank, in a podcast.