TOKYO: Japanese government bonds were higher on Thursday, led by 5-year JGBs after strong demand at an auction of those notes.
The Ministry of Finance offered 2.4 trillion yen ($22.51 billion) of 5-year JGBs with a 0.10 percent coupon.
The notes sold at a low price of 101.67, and drew bids of 4.66 times the amount offered, above the previous sale's bid-to-cover ratio of 4.15 times.
The tail between the average and lowest accepted prices shrank to 0.01 from 0.02 at last month's offering, indicating higher demand for the bonds.
The 5-year JGB yield fell 1.5 basis points to minus 0.240 percent.
The benchmark 10-year yield edged down half a basis point to minus 0.120 percent, while June 10-year futures added 0.13 point to 152.13.
Also underpinning demand for safe-haven fixed-income assets, data released early in the session showed Japan's core machinery orders tumbled more than expected in April by the most in two years.
Bank of Japan Deputy Governor Hiroshi Nakaso said on Thursday that the central bank was ready to expand monetary stimulus further if needed to achieve its price target.
Some indicators suggest there has been a decline in bond market liquidity this year, so the central bank will continue to carefully monitor the JGB market, Nakaso said in a speech to business leaders in Akita, northeastern Japan.
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