Demand at a sale of inflation-linked notes was not as bad as some investors had feared. The Ministry of Finance offered 500 billion yen ($4.06 billion)of 10-year JGBs linked to Japan's consumer price index (CPI) carrying a 0.1 percent coupon.
The lowest accepted price at the Dutch-style auction came in at 105.45, slightly below most market expectations, and the bid-to-cover ratio, a gauge of demand, fell to 2.21 from 2.33 at the last sale of the instruments in July.
Undermining bond market sentiment, US Treasuries prices dipped on Monday with two-year yields hovering at their highest levels in 5-1/2 years as traders raised bets the Federal Reserve will hike interest rates in December following a strong October jobs report.
The 10-year JGB futures price ended up 0.22 point at 148.42 , above a low of 148.20 touched in the morning session.
The yield on the 10-year cash bond fell 1.5 basis points to 0.315 percent, down from a session high of 0.335 percent.
In the superlong zone, the yields on 20-year JGBs and 30-year JGBs both rose 1.5 basis points to 1.080 percent and 1.380 percent respectively.