JGBs slightly softer on caution over auction, Treasuries

TOKYO Mon Aug 5, 2013 10:23pm EDT

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TOKYO Aug 6 (Reuters) - Japanese government bond prices were slightly easier on Tuesday on caution over an auction of long-term JGBs later in the day and after U.S. Treasuries slipped overnight on strong U.S. service data.

* The yield on the benchmark 10-year JGBs rose 0.5 basis point to 0.775 percent a day after having posted its largest fall in seven weeks following slower-than-expected U.S. jobs growth.

* The 20-year bond yield rose 1.0 basis point to 1.705 percent while the 30-year yield rose 1.0 basis point to 1.820 percent.

* The Ministry of Finance offered 300 billion yen of bonds in a "liquidity-enhancing" auction, in which the ministry re-offers existing 20- to 40-year bonds.

* "The talk in the market is that the auction may be a little bit weak," said Tadashi Matsukawa, the head of fixed income investments at PineBridge Investments in Tokyo.

* JGBs were not helped by a soft tone in U.S. Treasuries overnight. U.S. debt prices eased on Monday after the Institute for Supply Management's index on the U.S. services sector jumped to 56.0 from 52.2 in June, well beyond economists' forecast of 53.0.

* Ten-year JGB futures prices were flat at 143.72 at midday. Trading volume was a paltry 5,669 lots, less than one-fifth of the average daily volume so far this year.

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