JGB futures slide as stocks rise, auction eyed

By Rika Otsuka

TOKYO, Feb 19 (Reuters) - Japanese government bond futures slid in quiet trade on Tuesday as investors took their cue from gains in Tokyo stocks.

But other than higher share prices, investors had few new factors to trade on, with no major economic data due out this session and U.S. financial markets closed the previous day due to a national holiday.

Losses in JGBs were limited as market players were cautious about selling bonds on expectations that the Bank of Japan is unlikely to lift interest rates from the current 0.5 percent this year.

One focal point in the market is the Ministry of Finance's 700 billion yen ($6.5 billion) sale of 15-year floating rate JGBs on Tuesday.

"Poor auction results could spark a bond sell-off. But other than that, the government bond market is likely to be more influenced by moves in share prices this session," said Atsushi Ito, a JGB strategist at Morgan Stanley.

March 10-year JGB futures fell 0.17 point to 137.28 2JGBv1.

The benchmark 10-year yield climbed 2 basis points to 1.470 percent <JP10YTN=JBTC>.

The two-year yield edged up 0.5 basis point to 0.585 percent <JP2YTN=JBTC>, while the five-year yield rose 2 basis points to 0.950 percent <JP5YTN=JBTC>.