JGBs dip but losses limited on economy worries

* Dip but losses limited as GDP confirms weaker economy

* Five-year yield falls to a fresh 4-month low

By Satomi Noguchi

TOKYO, Aug 13 (Reuters) - Japanese government bonds edged down on Wednesday but losses were limited as weak growth data reinforced concerns about the nation's economic outlook, helping the five-year yield to hit a four-month low.

Japan's economy shrank 0.6 percent in the second quarter, as expected, adding to fears the nation may have slipped into a recession after its longest period of expansion since World War Two. [ID:nT271328]

That in turn cemented expectations that the Bank of Japan will keep interest rates on hold for several months, providing a boost to short-term maturities.

JGBs have gained as global growth worries were pushed to the fore with European monetary officials acknowledging that euro zone economies were slowing more than expected, and the Australian central bank providing growing scope for lower rates.

Money market futures JPONIBOJ=TRDT suggest investors do not see a rate hike within the year, although the futures also suggest investors are not expecting a rate cut either, prompting some market players to book profits from a recent bond market rise.

"The growth data matched expectations, not giving strong incentives for the market to trade on," said Shinji Ebihara, a quantitative analyst at Mizuho Securities.

"The market is waiting for further confirmation on the worsening outlook on the economy," Ebihara said.

September 10-year futures 2JGBv1 were flat at 137.71, trading below a four-month high of 137.87 hit on Monday.

The 10-year yield JP10YTN=JBTC rose 1.5 basis points to 1.465 percent, off a four-month low of 1.450 percent first touched earlier this week as investors moved funds out of the long-term sector into short-term notes, traders said.

The five-year yield JP5YTN=JBTC fell half a basis point to 1.000 percent, after dipping as low as 0.995 percent, the lowest since April.

The two-year yield JP2YTN=JBTC dipped half a basis point to 0.695 percent. (Editing by Michael Watson)