TOKYO: Japanese government bonds edged up on Monday as Japanese and regional shares fell on worries that possible credit rating downgrades of several European countries could derail progress towards resolving the debt crisis there.
Ten-year Japanese government bond futures rose 0.10 point to 142.41. In a thin market only 6,715 contracts traded by midday.
The yield on the cash 10-year JGBs fell 1.0 basis point to 0.970 percent, matching a three-week low hit last week.
Some banks are said to have bought the 20-year paper, which had become relatively cheap after Thursday's 20-year bond auction drew tepid demand.
The 20-year JGB yield fell 1.0 basis point to 1.740 percent. The spread between 10- and 20-year yields stood at 77 basis points, still near a three-month high of 77.5 basis points hit last week.
That partly reflected expectations that the Finance Ministry may increase the monthly offer of 20-year bonds to 1.2 trillion yen ($15.44 billion) in the fiscal year starting next April 1 from 1.1 trillion now.
Ministry officials will meet major JGB market players and investors later in the day to discuss the debt sales plan for next fiscal year.
While the ministry is expected to raise the issue amount of one or a few maturities, analysts expect a limited increase in overall JGB issues to the market.
The Nikkei share average fell 0.8 percent to 8,331.00 by midday while Asian shares excluding Japan fell 1.8 percent on worries about more credit downgrades in Europe.
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