The Bank of Japan's expanded monetary easing came just in time to spur a bond rally even as the ¥126 trillion Government Pension Investment Fund starts to cut debt holdings.

The 20-year yield dropped about 15 basis points in two days to the lowest since April 2013 after the BOJ unexpectedly increased purchases of government bonds to a record annual pace of ¥80 trillion last week.

That came just hours before the GPIF, the world's biggest pool of retirement savings, said it will reduce its domestic debt allocations to 35 percent of assets from 60 percent.