JGB yields fall after auction draws solid demand

TOKYO, May 24 (Reuters) - Japanese government bond (JGB) yields fell on Tuesday after an auction drew solid demand, even as U.S. Treasury peers rose overnight.

The 10-year JGB yield fell 0.5 basis point to 0.230% and the 20-year JGB yield fell 0.5 basis point to 0.720%.

The liquidity auction received bids worth 4.33 times the amount available, lower than the bid-cover ratio of 4.65 at the previous auction.

However, a market participant at a domestic brokerage said the results were relatively firm, with investors buying maturities which were running short in their portfolios.

U.S. Treasury yields rose overnight, as risk sentiment improved ahead of a busy week that will include minutes from the Federal Reserve's latest meeting and new supply of short- and intermediate-dated debt.

The 30-year JGB yield fell 1.5 basis points to 0.970% and the 40-year JGB yield fell 1.5 basis points to 1.095%.

The two-year JGB yield fell 0.5 basis point to -0.070%.

The five-year yield fell 0.5 basis point to 0.005%.

Benchmark 10-year JGB futures rose 0.09 point to 149.82, with a trading volume of 11,078 lots. (Reporting by Tokyo markets team; editing by Uttaresh.V)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.