TOKYO, Dec 4 (Reuters) - Japanese government bond prices gained and the yield curve flattened on Tuesday, with a rally in U.S. Treasuries lifting the debt market.
The benchmark 10-year JGB yield was 1 basis point lower at 0.070 percent at 0520 GMT, its lowest since Aug. 1.
The 30-year JGB yield declined 2 basis points to a four-month low of 0.790 percent.
The spread between the 10-year and 30-year JGB yields narrowed to 72 basis points, the flattest in three months.
The 2.2 trillion yen ($19.44 billion) 10-year JGB auction held on Tuesday attracted lukewarm demand, with the ongoing rise in bond prices seen to have prevented some investors from bidding actively for the new issues.
The auction bid-to-cover ratio, a gauge of demand, slipped to 3.82 from 4.33 at the previous sale in November.
U.S. Treasury yields have fallen steadily since the Federal Reserve suggested late last week that it may be nearing an end to its three-year rate hike cycle.
Extending an overnight slide, the 10-year Treasury note yield fell about 7 basis points (bps) to 2.937 percent, its lowest since Sept. 11. ($1 = 113.1400 yen) (Reporting by the Tokyo markets team)