Japanese government bonds languish as stimulus talks weigh

By Rocky Swift

TOKYO, June 11 (Reuters) - Japanese government bonds remained broadly lower on Wednesday, pressured by rising domestic equities and reports that lawmakers are considering new economic stimulus measures.

Long-dated Japanese government bonds have come under pressure in recent weeks amid growing concerns over the fiscal deficit and waning demand from life insurers and other traditional buyers.

The 40-year JGB yield JP40YTN=JBTC rose 1 basis point (bp), while the 30-year yield JP30YTN=JBTC was flat at 2.915% after earlier rising to a one-week high of 2.935%.

Yields move inversely to prices.

Japan's Nikkei .N225 gauge of stocks climbed for the fourth straight session on the day.

Japan's ruling coalition has agreed to a cash handout plan ahead of an upper house election in July, two sources familiar with the matter said on Tuesday.

After long-term yields scaled record peaks last month, Japan's finance ministry began to consider curtailing issuance of super-long bonds, Reuters has reported. The ministry is also said to be mulling debt buybacks.

A final decision on repurchases will be made after meetings with bond market participants on June 20 and June 23, sources said.

Uncertainty also remains over what the Bank of Japan may say next week about its bond-purchase programme as it aims to normalise monetary policy.

The benchmark 10-year yield JP10YTN=JBTC fell 2 bps to 1.455%.