JGBs drop ahead of 10-year auction (Reuters) (28-02-2011)

TOKYO - Japanese government bond prices lost gains on Monday as Tokyo shares trimmed earlier losses and as players sold debt to make room on their books ahead of a 10-year auction.

March 10-year futures were down 0.05 point at 139.54 after climbing to 139.76.

The Ministry of Finance is about to sell 2.2 billion yen of 10-year JGBs on Tuesday, with the coupon seen at 1.2 or1.3 percent. The offering is expected to be bolstered by enhanced appetite for government debt on tensions in the Middle East and North Africa.

The benchmark 10-year yield was up 1 basis point at 1.255 percent. The yield climbed to a 10-month peak of 1.350 percent earlier this month before the turmoil in the Middle East escalated.

The 5-year yield was unchanged at 0.545 percent and the 20-year yield was 1 basis point higher at 2 percent.

U.S. Treasuries gained in Asia on Monday after oil prices soared on worries about supply from Libya and the Middle East, on worries U.S. growth could be hindered by higher energy costs.

Japan's Nikkei stock average gained 0.9 percent on Monday.

Source: Reuters