JGBs inch up as Nikkei dips, await 10-year auction

By Masayuki Kitano

TOKYO, Feb 5 (Reuters) - Japanese government bond futures edged higher on Tuesday, bolstered by a fall in Tokyo share prices, although gains were limited ahead of an auction of 10-year JGBs.

JGBs shrugged off a slide in U.S. Treasuries overnight and reacted instead to an early dip in the Nikkei share average, said Naomi Hasegawa, senior fixed income strategist for Mitsubishi UFJ Securities.

"Since both U.S. shares and Treasuries were sold (overnight), there was some question as to which moves JGBs would take their cues from," Hasegawa said.

JGBs seemed to be shrugging off the fall in U.S. Treasuries on Monday as that decline was due to factors specific to the U.S. bond market such as position adjustment before this week's Treasury auctions, Hasegawa said.

"The weakness in equities is prompting some buy-backs (in JGBs)," Hasegawa said.

March 10-year JGB futures rose 0.09 point to 137.45 2JGBv1, pulling away from a one-month low of 137.16 struck on Monday.

The benchmark 10-year JGB yield dipped 0.5 basis point to 1.460 percent <JP10YTN=JBTC>.

In the stock market, the Nikkei share average fell 1.2 percent .N225.