TOKYO: Japanese government bond prices followed US Treasuries lower on Monday after a weekend deal to rescue Spain's banks took away some of the appeal of safe-haven assets, while some investors also sold ahead of this week's 5- and 20-year auctions.
European financial leaders agreed over the weekend to lend Spain up to 100 billion euros ($125 billion) for its bank rescue fund.
The Spain news alleviated much of the fear of debt contagion from that country and weighed on US Treasury prices.
Japan's finance ministry will auction 5-year JGBs on Tuesday and 20-year JGBs on Thursday.
The 10-year JGB yield added 1.5 basis points to 0.865 percent, moving away from a nine-year low of 0.790 percent hit one week ago.
The 10-year JGB futures contract for June, which expires on Monday, ended morning trading down 0.12 point at 143.66. The September contract slipped 0.16 point to 143.43.
The Bank of Japan will hold its regular monthly meeting on Thursday and Friday this week, and is widely expected to stand pat on monetary policy.
"The BOJ is unlikely to do anything ahead of the outcome of this weekend's Greek elections," said a fixed-income fund manager at a Japanese trust bank.
"JGBs are down a bit after the Spanish news, but uncertainly ahead of the Greek elections will likely limit moves," he said.
Greece will hold elections on June 17 that could determine whether it remains in the euro zone.
The 20-year yield added 1 basis points to 1.670 percent, while the five-year bond yield rose half a basis point to 0.205 percent.
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