JGBs fall after Treasuries, data eyed for rate clue

By Rika Otsuka

TOKYO, Dec 27 (Reuters) - Japanese government bond futures fell on Thursday, hurt by an overnight slide in U.S. Treasuries, while investors awaited a string of data for clues on the Bank of Japan's future policy path.

U.S. Treasury yields rose to their highest levels since mid-November on Wednesday as a recovery in stocks and a poor debt auction sparked selling. Bond prices and yields move inversely.

But the drop in JGBs remained moderate as domestic share prices weakened, snapping a four-day winning streak. The Nikkei share average .N225 was down 0.5 percent by midday.

"JGBs slipped as market players took their cue from the previous day's fall in Treasuries," said Atsushi Ito, a JGB strategist at Morgan Stanley. "But trading activity is so light that a slide in this session may not mean much."

March 10-year JGB futures fell 0.17 point to 136.13 2JGBv1. Volume was light at 11,953 lots.

The 10-year yield edged up 1 basis point to 1.565 percent <JP10YTN=JBTC> after rising as high as 1.570 percent in early trade.

Trade was subdued as many market players have already left for year-end holidays, while a heavy schedule of data starting later on Thursday kept investors on the sidelines.

November readings for housing starts and construction orders are due at 2 p.m. (0500 GMT).