By Agence France-Presse
Myanmar nationals Wa Lone, 31, and Kyaw Soe Oo, 27, are accused of possessing classified documents thought to relate to the violent military crackdown on the Rohingya Muslim minority.
The crackdown in northern Rakhine state has forced nearly 700,000 Rohingya Muslims over the border into Bangladesh since August, many carrying allegations of rape, mass murder and arson at the hands of Myanmar's army.
"The pair can't be granted bail according to the law... and the court has decided not to give them bail," judge Ye Lwin told the Yangon court of charges under the colonial-era Official Secrets Act.
The journalists, who have been in custody since December, say they were given the papers by two policemen who had invited them to dinner in the outskirts of Yangon.
As they left the restaurant, they say they were arrested before they even had a chance to look at the documents.
The court had discretion to grant bail if it deemed that their detention had been unlawful.
Myanmar authorities have been urged to free the journalists by media freedom campaigners as well as a cast of diplomats and international grandees including former US president Bill Clinton.
Thursday's bail decision was crucial as pre-trial hearings are expected to drag on for several months before the court officially decides whether to take on the case or not.
The pair are now expected to remain in jail throughout that period.
On hearing the refusal of bail, Wa Lone's wife Pan Ei Mon cried.
"I hoped to get it," she told AFP, crying. "I even cleaned his room last night to prepare for him getting bail."
Reuters has refused to comment on the exact details of what its correspondents were reporting on at the time of their arrest but it is widely thought they were investigating a massacre of Rohingya in the village of Inn Din in northern Rakhine.
The military later acknowledged members of the security forces took part in the extrajudicial killing, saying it would hold those responsible to account.
UN special rapporteur to Myanmar Yanghee Lee added her voice in support of the journalists from a press conference in Seoul, calling the pair "brave" and "fearless".
She has been banned from Myanmar by authorities who say she is working with a bias against the country.
"I remain deeply perplexed and concerned that they remain in detention despite the military having admitted responsibility for the killings at Inn Din," she said, adding that "they should be released immediately and the charges against them must be dropped."