Japan's benchmark 10-year bond yield touches 5-month low

TOKYO, June 10 (Reuters) – The yield on 10-year Japanese government bonds fell on Thursday to its lowest in nearly five months, following a retreat in U.S. Treasury yields, while strong response to a domestic liquidity auction lifted investor sentiment.

The liquidity auction held by Japan’s finance ministry received bids worth 4.42 times, higher than a bid-cover-ratio of 4.28 at the previous auction.

The 10-year JGB yield fell two basis points to 0.045%, the lowest since Jan. 29. The 20-year JGB yield fell one basis point to 0.420%.

U.S. Treasury yields fell overnight for a second day as traders positioned for inflation data due on Thursday and showed strong demand at an auction.

* The 30-year JGB yield fell one basis point to 0.655%.

* The two-year JGB yield was flat at minus 0.125%.

* The five-year yield fell one basis point to minus 0.115%.

* The 40-year JGB yield fell 0.5 basis point to 0.705%. * Benchmark 10-year JGB futures rose 0.18 point to 151.89, with trading volume of 48,775 lots.

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