TOKYO, Dec 5 (Reuters) - Japanese government bond yields hit four-month lows on Wednesday after an inversion in the U.S. yield curve stoked worries about a recession in the United States, though they clawed back later in the session on profit-taking.
JGBs gained broadly, with the five-year yield hitting a one-year low of minus 0.130 percent. The benchmark 10-year futures price hit two-year highs.
The gains came even as the Bank of Japan (BOJ) appeared to be on course to trim bond buying this month, continuing with its gradual tapering since 2016.
U.S. bond yields dipped and their yield curve partially inverted this week, stoking worries that a U.S. recession may be looming down the road after a decade of economic expansion.
In its first purchase of super-long JGBs this month, the BOJ offered to buy 250 billion yen.
This month, the BOJ trimmed the frequency of its purchase in that tenor to four from five times. The purchase suggested its total buying in December is likely to be around 1 trillion yen, 150 billion yen less from November.
The market, however, took the announcement in its stride.
The 20-year yield hit a low of 0.545 percent, while the 30-year yield dropped to 0.765 percent, both hitting four-month lows.
JGBs lost steam after yields hit those lows, with many investors starting to take profits from recent gains.
Nomura BPI, a popular JGB index, posted gains of 0.42 percent last month, the biggest in 14 months.
The benchmark 10-year yield dropped to 0.050 percent, the lowest since July 31, before stepping back to 0.065 percent , flat from Tuesday.
The 10-year JGB futures rose to as high as 151.67 before ending down 0.04 point at 151.44. (Reporting by Hideyuki Sano, Editing by Sherry Jacob-Phillips)