Japan's Ministry of Finance offered 2.4 trillion yen ($28.6 billion) of five-year JGBs with a coupon of 0.5 percent, down from 0.6 percent at the previous five-year auction in March.
Bids totalled 3.56 times the amount of offers accepted, up from 3.49 the previous offering. The ratio is slightly lower than 3.61, the average ratio from the past 12 auctions.
The tail was 0.02 and tightened from 0.03 at the previous auction last month. The tail is the difference between the average and the lowest price at an auction. A tighter tail suggests there is more consensus about where new bonds should be priced and is regarded as a sign of strong demand.
Lead 10-year JGB futures were up 0.17 point at 138.92 after the auction result announcement. They closed at the end of the morning session at 138.91.
"It was a firm result and was in line with market expectations. Demand was pretty good, and worries that banks may not buy as they need cash to lend for quake relief didn't materialise.
"Investors probably judged that the five-year sector will not be affected by worries about increases in bond sales in the future.
"As the market has absorbed most of the new issues this month, market sentiment will improve. The 10-year yield will stay around 1.3 percent."
The five-year yield dropped to 0.435 percent in mid-March, the lowest since January as the Bank of Japan took measures such as increasing funds for asset buying in order to tackle financial market instability following a massive earthquake on March 11.
The yield moved up to 0.565 percent in early April amid increasing caution about potential extra issuance to finance the budget for reconstruction, but the yield stayed well below a 15-month high of 0.625 percent marked in early February.
Analysts said the auction was likely to draw decent demand as the five-year yield remained relatively high in light of expectations that Japan's monetary policy will stay loose for the foreseeable future.