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JGB futures dip as Nikkei rallies, weak data helps
TOKYO, Sept 10 (Reuters) - Japanese government bond futures edged down on Thursday as Tokyo's Nikkei stock average rallied 1.7 percent .N225. Losses were limited as the market drew support from weaker-than-expected Japan machinery orders data.
* December 10-year JGB futures 2JGBZ9 shed earlier gains and dipped 0.05 point to 138.88. The December contracts took the lead role from the September contracts, which expire on Thursday.
* Midterm JGB prices gained on persistent demand from domestic banks and yields in the middle of the curve have dropped sharply after a five-year tender on Tuesday drew the strongest demand in over four years. The five-year yield JP5YTN=JBTC fell 0.5 basis point to 0.600 percent.
* Big domestic banks as well as regional banks have been parking their surplus funds in short to midterm JGBs, market players said. The banks have been left with ample money due to the Bank of Japan's easy monetary policy and slow growth in lending in recent months.
* Japan's core machinery orders fell 9.3 percent in July from the month before, below a median market forecast for a 3.5 percent decrease. [ID:nT109099]
* The benchmark 10-year yield JP10YTN=JBTC was unchanged at 1.325 percent. (Reporting by Shinichi Saoshiro; Editing by Edwina Gibbs)
