The Ministry of Finance will offer 1.2 trillion yen ($15 billion) of 20-year bonds on Thursday.

"Some investors are unloading the 30-year, which appears to be an adjustment to their portfolios to buy the 20-year tomorrow, which explains the steepening today," said a fixed-income fund manager at a Japanese asset management firm.

"I'm optimistic about the auction, because the outright level is fair and demand from insurers and regional banks should be there," he added.

The 10-year JGB yield added half a basis point to 0.850 percent, while the 10-year JGB futures contract for September ended morning trade down 0.08 point at 143.57 yen.

Some strategists have said that buying ahead of a quarterly redemption of JGBs on June 20 will also support demand at the auction, as investors seek value further up the yield curve.

Continuing worries about the euro zone debt crisis are also likely to underpin demand for fixed income assets ahead of Greek elections looming on June 17, that could determine whether the country remains in the euro zone.

Investors also remained wary of a weekend deal to recapitalise Spain's banks and its impact on that country's public finances

The 20-year yield rose 1.5 basis points to 1.680 percent, while the 30-year yield added 2.5 basis points to 1.865 percent.  

The five-year yield rose 1 basis point to 0.230 percent, moving away from its nine-year low of 0.195 percent touched several times this month.

The Bank of Japan will hold its regular monthly meeting on Thursday and Friday this week, and is widely expected to stand pat on monetary policy.