Japanese government bonds edge lower ahead of 30-year debt auction

By Rocky Swift

TOKYO, July 3 (Reuters) - Japanese government bonds (JGBs) fell on Thursday ahead of the first super-long debt auction under the government's new reduced-issuance scheme introduced in response to record-high yields.

The yield on the benchmark 10-year JGB JP10YTN=JBTC rose 1.5 basis points (bps) to 1.440%. The 30-year yield JP30YTN=JBTC rose 0.5 bp to 2.89%.

Yields move inversely to bond prices.

The market for JGBs, particularly long-dated bonds, has faced challenges of late amid the Bank of Japan's (BOJ) tapering of bond purchases, softer demand from life insurers and concerns over the nation's fiscal health.

A 20-year JGB auction in May saw the weakest demand since 1987 and the subsequent sales of 30- and 40-year securities saw subdued uptake in the market.

Yields on the super-long debt surged to record levels, prompting the government to curtail the issuance of the securities.

The Ministry of Finance is due to auction about 700 billion yen ($4.9 billion) of 30-year JGBs on the day, down from the sale of about 800 billion-900 billion yen in June.

The five-year yield JP5YTN=JBTC rose 1 bp to 0.980%.

($1 = 143.5700 yen)