TOKYO: Benchmark Japanese government bonds edged higher on Tuesday as investors were cautious ahead of a tightly-fought US presidential election and this week's Greek parliament vote on further austerity steps.
The 10-year yield slipped 0.5 basis point to 0.760 percent, nearing last month's low of 0.755 percent.
Ten-year JGB futures advanced 12 ticks to 144.30 to a one-week high and above the five-day moving average at 144.19. Trading was relatively light, with 20,817 contracts, below last week's average of 27,336 contracts but nearly double Monday's four-month low of 11,992.
Akito Fukunaga, chief rates strategist at Royal Bank of Scotland in Tokyo, said market reaction was likely to be muted if incumbent US Presidential Barack Obama wins the election.
Some had said an Obama victory would prompt investors to shun risky assets, with the ongoing 'fiscal cliff' issue in the United States driving US Treasury yields as well as JGB yields lower.
"We will not see sharp movement either way, especially the case if Obama wins. The market has probably factored in an Obama victory. The impact will be limited," he said.
The latest Reuters/Ipsos national poll of likely voters, a daily tracking poll, gave Obama a slight edge, with 48 percent support compared to Republican candidate Mitt Romney's 46 percent.
Yields on 30-year bonds dipped 0.5 basis point to 1.940 percent, while those on 20-year debt were unchanged at 1.685 percent.
A fund manager at an asset management firm in Tokyo said benchmark 10-year yields were likely to be trapped in a range for some time as the market had mostly priced in an Obama victory.
"In terms of Greece's discussion, JGBs should be supported so the downside should be quite, quite limited," he said.
Workers in Greece begin a 48-hour strike on Tuesday to protest against a new round of spending cuts and reforms, ahead of this week's vote in parliament.
Athens needs parliamentary approval for the package to ensure its European Union and International Monetary Fund lenders release more than 31 billion euros ($39.63 billion) of aid.
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