JGB fall for 2nd day as oil slide boosts stocks

* JGBs down as oil retreat lifts shares, hurts Treasuries

* Activity subdued before 20-year auction, trade and CPI data

* Investors seen buying on dips, limiting yield rise

By Eric Burroughs

TOKYO, July 23 (Reuters) - Japanese government bonds retreated for a second straight day on Wednesday as a slide in oil prices from record peaks gave a lift to Tokyo shares and took some of the sting out of disappointing U.S. corporate earnings.

Losses were limited as investors have been taking advantage of a jump in benchmark yields from three-month lows struck last week to allocate funds to the market, believing the Bank of Japan is a long way from considering raising interest rates.

The Japanese government sharply downgraded its economic growth forecast for the current business year to 1.3 percent from 2.0 percent, citing rising energy and commodity costs, a U.S. slowdown and a stronger yen. [ID:nT299973]

While not a surprise, the report highlighted why the BOJ has felt that risks to growth are more of a threat than the pick-up in core inflation to a decade high.

"On the BOJ, no one thinks there's going to be any action soon," said Joseph Kraft, head of Japan capital markets at Dresdner Kleinwort.