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JGBs gain after strong auction for U.S. Treasury notes

TOKYO, Jan 13 (Reuters) - Japanese government bond prices gained on Wednesday after strong demand for 10-year U.S. Treasury notes helped reverse the bearish mood sparked by the Senate runoffs last week.

U.S. Treasury prices posted substantial gains on Tuesday for the first time this year, bringing down the benchmark 10-year yield to 1.121% from a 10-month high of 1.187%.

The upbeat mood in global bonds overrode a small disappointment after an auction of 2.5 trillion yen five-year JGBs drew tepid demand.

The auction’s tail widened to 0.03 from 0.02 in the previous auction, while the bid-to-cover ratio fell to 3.83 from 3.96.

The 10-year JGB yield fell 0.5 basis point to 0.025% while the 20-year yield fell one basis point to 0.405%, off a four-month high of 0.420% set on Tuesday.

The 30-year JGB yield fell 1.5 basis points to 0.630%.

At the shorter end, the five-year yield was flat at minus 0.115% following the soft auction results of that maturity.

Benchmark 10-year JGB futures rose 0.04 points to 151.90. (Reporting by Tokyo Markets Team; Editing by Ramakrishnan M.)

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