TOKYO: Japanese government bond (JGB) yields rose on Wednesday as caution over a 20-year bond auction in the next session prompted investors to sell bonds.

The 40-year JGB yield jumped 4 basis points (bps) to 1.855% and the 30-year yield rose 2.5 bps to 1.620%. The 20-year yield increased 1.5 bps to 1.310%.

“The outcome of a five-year bond auction earlier this week was weak and market players were cautious about the result of the 20-year bond auction on Thursday,” said Ataru Okumura, senior strategist at SMBC Nikko Securities.

“Also yields overall fell too much in recent sessions and the market players thought the market as overshoot.”

The yields touched multi-month lows earlier this week, tracking US Treasury peers lower, with the two-year yield dropping below zero for the first time since July.

The finance ministry will sell fewer amounts of 20-year bonds this year, reflecting weaker demand for long-dated debt.

JGB yields fall amid fading bets on BOJ policy shift

However, that does not support investor sentiment as the Bank of Japan has also lowered the amount of longer-dated bonds it would buy from the market.

The 10-year JGB yield rose 1.5 bps to 0.605%.

The two-year JGB yield rose 0.5 bp to 0.020%.

The five-year yield rose 1 bp to 0.210%.