Japan's 30-year bond unchanged after expected weak auction

TOKYO, June 6 (Reuters) - Japan's 30-year government bonds (JGBs) were flat on Friday after being untraded for most of the session, following a weak auction for bonds with the same tenor in the previous session.

The 30-year JGB yield JP30YTN=JBTC was flat at 2.885%.

The bond price rose in the previous session even as the closely monitored auction witnessed the weakest demand in more than a year.

The price was underpinned by expectations for a possible cut in the issuance of new bonds by the finance ministry, while the poor outcome was within market expectation, strategists said.

"Also, there is a view emerging in the market that foreign investors have started buying the bonds," said Tomoaki Shishido, senior rates strategist at Nomura Securities.

"Because top bidders of the 30-year bond auction yesterday were European brokerages, which is not common."

The auction proved poor demand in so-called super-long bonds, but separate data showed inflows of foreign money into Japanese long-term bonds in the latest week following sell-offs in May.

The 20-year JGB yield JP20YTN=JBTC fell 2 basis points (bps) to 2.335%. The 40-year JGB yield JP40YTN=JBTC fell 1.5 bps to 3.055%.

Yields on shorter-dated bonds climbed, with the two-year JGB yield JP2YTN=JBTC rising 1.5 bps to 0.765% and the five-year yield JP5YTN=JBTC up 2 bps to 1.025%.