JGBs rise on soft U.S. data, 2-year auction eyed

TOKYO, April 25 Wed Apr 24, 2013 10:34pm EDT

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TOKYO, April 25 (Reuters) - Yields on Japanese government bonds slipped on Thursday, tracking U.S. Treasuries after weak U.S. durable goods data stirred concerns about a slowdown in the world's biggest economy.

* The Ministry of Finance is to sell 2.9 trillion yen ($29 billion) of two-year bonds with a 0.10 percent coupon later in the day. The two-year yield was unquoted.

* Yields on benchmark 10-year bonds eased 1.5 basis points to 0.580 percent, while 10-year futures added 0.14 point to 144.75.

* The 20-year yield inched down 1.5 basis point to 1.465 percent and the 30-year yield slipped 1 basis point to 1.590 percent.

* U.S. durable goods orders recorded their biggest drop in seven months in March and a gauge of planned business spending rose only modestly, the latest sign of a slowdown in economic activity.

* Longer maturities were also supported on expectations that life insurance companies would largely maintain their purchase of JGBs.

"Lifers generally may increase their foreign bond investment. But the total amount appears to be flat versus the amount last year," said Yuya Yamashita, rates strategist at JPMorgan.

"I do not think the lifers will increase foreign bond buying at these yield levels ... I don't think lifers will significantly decrease the amount of JGB purchases for their bond investment."

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