JGBs down, Nikkei reaction to N. Korea news eyed
* JGBs sag on as Treasuries extend losses, Nikkei gains
* JGBs could pare losses if Nikkei slips on N.Korea test
By Shinichi Saoshiro
TOKYO, May 25 (Reuters) - Japanese government bonds edged down on Monday, nudged lower by a slide in U.S. Treasuries and a 1.1 percent gain by Tokyo's Nikkei stock average .N225.
Upcoming supply also weighed on JGBs, as dealers sold in the super long zone to make room in their books ahead of the Ministry of Finance's 900 billion yen ($9.5 billion) 20-year offering on Tuesday.
But JGBs could pare losses once trading resumes at 0330 GMT after North Korea said it had successfully conducted a nuclear test on Monday, as this may reverse the Nikkei's rise during the morning session. [ID:nSEL000621]
U.S. Treasuries extended losses on Friday, hit as worries over the United States' credit worthiness continued to dog the market ahead of a string of debt auctions this week. [US/]
"The rise in JGB yields is a response to what has been taking place in Treasuries, but now a wait-and-see mood is prevailing, with investors wanting to see how the U.S. bond market handles this week's auctions," said Tatsuo Ichikawa, a senior fixed-income strategist at RBS Securities.
The U.S. Treasury will issue $101 billion of coupon-bearing debt this week, starting with a two-year offering on Tuesday.
June 10-year futures fell 0.19 point to 136.70 2JGBv1.
The two-year yield rose 1 basis point to 0.355 percent JP2YTN=JBTC.
The five-year yield climbed 1.5 basis points to 0.805 percent JP5YTN=JBTC.
The benchmark 10-year yield also rose 1.5 basis points, to 1.445 percent JP10YTN=JBTC.
The 20-year yield was 1.5 basis points higher at 2.125 percent. JP20YTN=JBTC (Reporting by Shinichi Saoshiro; Editing by Edwina Gibbs)
