TOKYO: government bond yields inched higher on Thursday, with the 10-year yield moving away from a nine-year low hit this week as investors made room ahead of an auction of 20-year debt later in the day.
The 10-year yield was up 1 basis point to 0.73 percent, backing off from Wednesday's level, which matched a nine-year low touched earlier in the week.
Yields on 20-year debt ticked down 0.5 basis point to 1.530 percent ahead of the Ministry of Finance's auction of 1.2 trillion yen ($15.34 billion) worth of bonds at the same maturity.
"We have seen some correction throughout the week after touching the lowest in nine years for the yield and highest for the futures since 2003. I don't think the basic sentiment has changed at this point," said Maki Shimizu, senior strategist at Citigourp Global Markets Japan.
"Many people haven't been able to buy JGBs much so far. I don't think they are showing very aggressive purchase or willingness to buy at this point because ... deeper the dip is better. People are just watching at the global development."
Morgan Stanley MUFG said in a note that the 20-year bonds looked unattractive in the yield curve and butterfly trades.
"Twenty-year remains rich within the superlong sector, while a consideration of expected returns suggests that barbell positions should still be favoured over 20-year bullets," Morgan Stanley MUFG said.
Ten-year JGB futures dropped 10 ticks to 144.53, retreating further away from a nine-year high of 144.64 hit in the previous three sessions and breaking below its five-day moving average at 144.55.
* The five-year yield edged up 1 basis point to 0.180 percent.
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