Medium-dated cash bonds were firm as Japanese banks, the main players in the maturity, shifted their money after recent selloffs which sent the five-year yield to a two-month high, though the JGB market as a whole lacked clear direction, market participants said. "It is hard to predict how investors are going to behave in the second-half of this fiscal year (ending in March 2012) as it has just started today, but we should be able to gauge investor demand from tomorrow's 10-year sale," said a trader at a Japanese bank. December 10-year JGB futures inched up 0.10 point to an early high of 142.33, though they later sunk into negative territory at 142.22, weighed by hedge selling. JGB futures closed up 0.04 point at 142.27 on Monday, clinging near the upper-end of the Ichimoku cloud at 142.29. The Nikkei stock average closed down 1.8 percent on Monday. In cash bonds, the yield curve steepened from Friday as the five-year yield declined 1.5 basis points to 0.355 percent, while the 30-year yield rose 1 basis point to 1.920 percent. The benchmark 10-year JGB yield inched down 0.5 basis point to 1.020 percent, having hit a one-month high of 1.025 percent on Friday. BOJ tankan The impact from the tankan survey released by the Bank of Japan on Monday was subdued as the results were in line with expectations, according to market participants. Japanese business sentiment recovered in the third quarter from the post-earthquake shock, but a strong yen and Europe's debt crisis made companies cautious about the outlook. "Business sentiment recovered, but the numbers reflect survey results mainly collected at the beginning of September, and do not factor in stock market plunges we saw by the end of the month," said Hidenori Suezawa, chief strategist at SMBC Nikko Securities. "Big manufacturers expect the dollar to average 81 yen in the fiscal year to March 2012, but that is not taking into account the recent surge in the yen ... that makes it a difficult factor to trade JGBs on." Sentiment in the JGB market worsened slightly ahead of a 10-year note auction, though the 10-year yield was expected to remain near 1 percent, a Reuters weekly survey showed on Monday. The Ministry of Finance will offer 2.2 trillion yen ($28.5 billion) of 10-year JGBs on Tuesday.