TOKYO: Japanese government bond prices rose on Thursday, after a weak Spanish bond auction sapped investors' risk appetite, weighed on stocks and rekindled fears about Europe's debt situation.

The June 10-year JGB futures contract gained 0.15 point to 141.73.  

The yield on 10-year notes fell 1.5 basis point to 1.010 percent, moving further away from the March 15 high of 1.060 percent, which is seen as major support.

Spain's borrowing costs jumped at bond auctions on Wednesday, with the 10-year bond yield leaping to 5.7 percent, its highest since January. That heightened concerns about funding difficulties by lower-rated euro zone countries.

"The major concerns regarding headwinds still exist. If there's global headwinds, JGBs will continue to do very well," said a trader at a European brokerage in Tokyo.

"It will be slow grind, if anything in Japan, for higher rates, if they ever get there. I don't see an environment in the near-term where rates will be under pressure," he added.

Slumping stocks added to investors' risk aversion and raised the appeal of bonds. The benchmark Nikkei extended the previous session's sharp losses and shed 0.8 percent to a four-week low.

The 30-year bond yield slipped one basis point to 1.970 percent, moving away from a four-month high of 1.990 percent hit on Wednesday.

The 20-year bond yield fell two basis points to 1.780 percent, while the five-year bond yield slipped 1.5 basis point to 0.330 percent.