TOKYO: Japanese government bond prices mostly inched down on Wednesday as investors took profits after a rally in the wake of easing steps by the Bank of Japan last week that pushed some yields to 1-1/2 year lows.
The 10-year JGB yield climbed half a basis point to 0.880 percent from its close on Tuesday at 0.875 percent, its lowest level since October 2010.
The 10-year JGB futures contract ended the morning session down 0.05 point at 143.11.
The superlong tenor held gains it made when it outperformed the day before, however, with the 20-year JGB yield flat at 1.670 percent, its lowest level since October 2010.
The 30-year JGB yield was also flat at 1.855 percent, its lowest since September 2011.
"The rally is slowing but even so, selling is light and mostly at the shorter end because even with yields at such low levels, pension funds and insurers have to buy, to put their funds somewhere," said a fixed-income fund manager at a Tokyo asset management firm.
On Friday last week, the Bank of Japan further eased monetary policy by expanding JGB purchases by 10 trillion yen ($124 billion). The BOJ also extended the remaining maturity of the JGBs it buys under its asset buying programme to up to three years from two.
Investors looked past Japan's Golden Week holiday to try to gauge demand next week, particularly at an auction of 10-year bonds.
Japan's markets will be closed on Thursday and Friday, and were also shut on Monday this week.
The Ministry of Finance will offer 2.3 trillion yen of 10-year bonds on Tuesday, in the second 10-year bond auction of the financial year that started on April 1.
The previous sale was lacklustre, as while it drew strong bids, most buying came from brokers covering short positions rather than from real-money buying by banks, insurers or funds.
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