TOKYO: Japanese government bonds inched higher on Monday, though any moves were seen as limited in a holiday-shortened week as markets take a breather from a sell-off last week that sent the benchmark yield to a three-month high.
Monday's trading activity is relatively thin as Tokyo markets are closed on Tuesday.
The yield on the latest 10-year JGB edged down half a basis points to 1.045 percent, down from a three-month high of 1.060 percent touched last Thursday.
"It's hard to imagine rates rising much from these levels soon, and their climb last week was due in large part to the influence of outside factors," said Keiko Onogi, senior JGB strategist at Daiwa Securities.
Ten-year JGB futures inched up 0.04 point to 141.26, after plunging to an eight-month low on Thursday.
The contract logged its biggest two-day drop since October 2008, on aggressive selling by hedge funds after Treasuries plunged on the US Federal Reserve's brighter economic outlook.
The drop in futures pressured cash bonds, but their sell-off was less dramatic as they remain supported by expectations of buying ahead of the end of Japan's fiscal year at the end of this month.
The 20-year yield fell one basis point to 1.795 percent, moving away from a three-and-a-half-month high of 1.830 percent on Thursday.
The 5-year yield also shed one basis point to 0.355 percent, moving away from a three-and-a-half-month high of 0.375 percent touched on Thursday and Friday.
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