JGBs slow down (Reuters) (24-01-2011)

TOKYO - Japanese government bonds edged lower on Monday, with a bounce in Tokyo shares.

The two-year yield rose 1 basis point to 0.190 percent while the five-year yield climbed 1.5 basis points to 0.500 percent.

The benchmark 10-year yield gained 2.5 basis points at 1.235 percent, widening the two-year/10-year yield spread by 1.5 basis points to 104.5 basis points.

The long end extended losses after a 300 billion yen ($3.6 billion) re-offering of 10-year and 20-year government debt by Japan's Ministry of Finance drew slightly weaker demand than the previous sale last month.

March 10-year JGB futures slipped 0.13 point to 139.61 while BOJ policymakers will focus on how recent commodity price rises and growing optimism over the U.S. economic recovery could affect its long-term economic outlook.

JGBs are expected to follow any surprise in U.S. Treasury yields, which they have been tracking fairly closely.

Source: Reuters