TOKYO: Japanese government bond futures edged higher on Tuesday as the week got off to a cautious start with investors facing a parade of crucial US economic data on their return from a holiday-lengthened weekend.

Benchmark 10-year government bond futures ticked up 0.08 yen to 145.17 yen as of 0336 GMT, while the yield on the cash bond was flat at 0.855%.

Five-year JGB yields rose 1.5 basis points (bps) to 0.45%, with investors selling the notes ahead of an auction of new supply on Wednesday.

Other JGB tenors had yet to trade.

The bond market had been shaken last week by a sudden jump in fears of a US recession following a weak monthly payrolls report on Aug. 2, which sent Japanese shares tumbling last week while the yen surged.

Calm has largely returned to markets now, but investors are still wary with US producer prices data due later on Tuesday, consumer inflation figures on Wednesday, and retail sales numbers on Thursday - all with the potential to alter the economic outlook.

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Monday was the official Obon holiday in Japan, but many market participants will be out all week, making for thin and potentially volatile trading.

A Reuters report that Japan's parliament will hold a special session next week to discuss the Bank of Japan's decision last month to raise interest rates added an additional layer of caution, said Shoki Omori, chief Japan desk strategist at Mizuho Securities.

"Investors are in a cautious mood after going through rough times last week," Omori said.

"Supply-demand dynamics are unchanged, but the JGB market can easily be affected by external factors," particularly the US data, he added.

"Those external factors are going to be key for yen rates."