Super-long JGBs fall as lack of details on MOF's possible sale reduction weighs

TOKYO, May 29 (Reuters) - Super-long Japanese government bond prices fell on Thursday as a lack of details about the Ministry of Finance's issuance plans weighed on sentiment.

The 20-year JGB yield JP20YTN=JBTC rose 2.5 basis points (bps) to 2.42% and the 30-year JGB yield JP30YTN=JBTC rose 5 bps to 2.95%.

Bond yields move inversely to prices.

The yields on the super-long-dated bonds plunged on Tuesday from last week's record highs, after Reuters reported that the finance ministry was considering reducing its sales of super-long bonds.

"Expectations are rising that there will be a cut in the sale of those bonds, but they can not actively buy the bonds without a clear picture of the reduction," said Naoya Hasegawa, chief bond strategist at Okasan Securities.

The auction of 40-year bonds on Wednesday witnessed a weak outcome after the bond rally made the bonds look expensive.

However, Societe Generale said in its note that the selling pressure on the long-end JGBs will abate as pension funds' rebalancing will support demand for ultra-long-term bonds.

Attention has been shifted to an auction of two-year bonds in the next session.

Okasan's Hasegawa expects the auction will see relatively firm results even as Reuters reported the reduction in bonds with super-long maturities would be counterbalanced by increased sales of shorter-dated bonds.

"That would pressure yields on two-year bonds in the future, but if you have to keep buying JGBs and want to avoid duration risks, you would choose two-year bonds," Hasegawa said.

The two-year JGB yield JP2YTN=JBTC rose 0.5 bp to 0.75%.

The five-year yield JP5YTN=JBTC fell 1 bp to 1.03%.