TOKYO: Japanese government bond prices were down slightly on Thursday, taking their cues from weaker US Treasuries prices overnight as European debt concerns faded and facing some selling ahead of a 30-year auction.
* The finance ministry is offering 700 billion yen of 30-year bonds, with most investors expecting the sale to meet decent demand and results to come in line with recent sales in that tenor.
Brokers were likely to be buyers, market participants said, although pension funds and institutional investors might hold off on buying in the first 30-year auction of the fiscal year that began this month.
The yield on the latest 10-year notes was flat at 0.945 percent, while the June 10-year JGB futures contract fell 0.02 point to 142.54.
On Wednesday, the yield on the benchmark cash issue touched a three-month low 0.935 percent on renewed concerns about European debt as well as expectations of further monetary easing by the Bank of Japan.
"Profit-taking seems to emerge whenever the 10-year yield falls around 0.950 percent, so that appears to be a resistance point," said Keiko Onogi, senior JGB strategist at Daiwa Securities Capital Markets.
The yield on the 30-year JGB was flat at 1.915 percent after falling as low as 1.905 percent on Wednesday, its lowest level since Feb. 21.
The yield on the 5-year JGB was flat at 0.295 percent after falling to 0.285 percent on Wednesday, which was its lowest since March 8.
The previous 30-year sale last month had a bid-to-cover ratio of 3.97, above the 3.79 average from the 12 auctions before it. But the tail measuring the difference between the lowest and average accepted prices widened slightly to 0.07 from 0.05.
The yield on 20-year JGBs added half a basis point to 1.725 percent, after declining to 1.710 percent on Wednesday, its lowest since Feb. 20.
Investors will use a 5 billion euro bond sale by Italy later on Thursday to gauge market risk tolerance.
Bank of Japan Governor Masaaki Shirakawa cited Europe as a concern in a speech on Thursday, but said Japan's economy is headed for a moderate recovery.
"Global financial markets are stable as a whole. But we need to stay mindful of the risk that Europe's debt problems may affect Japan through market developments," Shirakawa said.
Shirakawa reiterated the BOJ's commitment to pursue powerful monetary easing to pull Japan out of deflation. At its February meeting, it set an inflation target of 1 percent, and it also unexpectedly eased policy by increasing the size of its asset buying programme.
The BOJ will consider further asset-buying easing steps at its next policy meeting on April 27, sources said.
BoJ data on Thursday showed Japanese wholesale prices rose 0.6 percent in March from a year earlier.