Japan bonds sold, this time in relief

SINGAPORE/TOKYO, April 10 (Reuters) - Japanese government bonds were sold on Thursday as investors moved money back to stocks and cheered U.S. President Donald Trump's reversal of some of his heaviest import tariffs.

The benchmark 10-year JGB yield JP10YTN=JBTC rose 6.5 basis points (bps) to 1.335% in afternoon trade. Futures 2JGBv1 fell 0.76 point. The Nikkei .N225 stock index roared more than 8% higher.

Selling lifted the two-year yield JP2YTN=JBTC 7.5 bps to 0.68% and the five-year yield went up 3 bps to 0.86%.

Overnight Trump announced a 90-day pause on duties imposed on many countries though he left a 10% blanket duty on almost all imports, and raised tariffs on China. And the reversal did not appear to include winding back auto, steel and aluminium taxes.

Analysts said the moves and mood in the JGB market were a far cry from a day earlier when long bonds were being dumped in a near panic as investors liquidated just about everything.

"At the super-long end, it's a little bit more relieved today," said Nomura strategist Naka Matsuzawa.

Wednesday had been an historic day in U.S. and global bond markets as the traditionally safe assets were sent into a tailspin as hedge funds unwound leveraged bets in bonds and investors scrambled for cash above all.

That hit Japan especially hard as the sudden steepening of the yield curve caught out markets that were positioned for flattening as Japan raises short-term rates, said Kentaro Hatono, head of global fixed income, Asset Management One.

"Today, investors have just corrected their excessive moves in the previous session. It is a bit early for them to put their positions back where they were," he said.

The 30-year JGB yield JP30YTN=JBTC, which hit a 21-year high in the previous session, slipped 5 bps to 2.65%. The 20-year JGB yield JP20YTN=JBTC fell 3.5 bps to 2.25%.