TOKYO: Japanese government bonds fell on Wednesday, as equities got a tailwind from a weaker yen and reduced the safe-haven appeal of government debt.
The Nikkei stock index ended up 1 percent at a more than two-week high, as the dollar rose to a one-month high against the yen.
The benchmark 10-year JGB yield was up 1.5 basis points at minus 0.065 percent, while September 10-year futures ended down 0.10 point at 151.41.
The Ministry of Finance will hold its monthly auction of 10-year JGBs on Thursday.
The yield curve modestly steepened, with the 20-year JGB yield adding 2.5 basis points to 0.335 percent and the 30-year JGB yield also rising 2.5 basis points to 0.420 percent.
Bank of Japan board member Yukitoshi Funo told a news conference after meeting business leaders in Niigata, northern Japan on Wednesday that he saw no signs now the bank was reaching its limits in buying bonds or deepening negative rates.
Downbeat economic data provided some support for JGBs. Growth in Japan's industrial output unexpectedly ground to a halt in July after June's gains, underscoring the fragility of factory activity.
Japanese fund managers increased exposure to bonds in their model portfolios in August while trimming their stock holdings to the lowest level on record over the past five years amid monetary policy uncertainty at home, a Reuters survey published on Wednesday showed.
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