TOKYO: Japanese government bond yield curve steepened on Thursday, as super-long tenors tracked US peers, while caution about the central bank intervening again to stop borrowing costs from rising further capped gains in benchmark 10-year bond yields.

The 30-year JGB yield jumped 5.5 basis points to fresh high of 0.985%, the highest since February 2016. The 20-year JGB yield rose 3.5 basis points to 0.735%, the highest since February 2017.

The 40-year JGB yield rose 3.5 basis points to 1.005%, the highest since November 2018.

The 10-year JGB yield rose 0.5 basis point to 0.220%, staying below the central bank's 0.25% target since the Bank of Japan successfully defended its key bond yield target on Monday by offering to buy an unlimited amount of the 10-year debt at 0.25%.

Japan government bond yields rise on weak auction outcome

Takayuki Miyajima, senior economist at Sony Financial Group, said gains in yields on super-long bonds will slow down eventually, as there is a demand for super-long tenors from life insurers.

An auction for the 20-year debt earlier in the day also proved healthy demand for long ended notes, he added.

Demand at 20-year JGB auction earlier in the day increased from the previous sale, with the so-called bid-to-cover ratio improving to 3.39 times from 3.18.

The two-year JGB yield rose one basis point to minus 0.015%, its highest since January 2016.

The five-year yield rose 0.5 basis point to 0.055%, the highest since October 2015.

Benchmark 10-year JGB futures rose 0.06 point to 149.96, with a trading volume of 26,408 lots.