JGB market sentiment negative for 4th week - Reuters survey

TOKYO, Jan 28 (Reuters) - A weekly gauge of sentiment in the Japanese government bond market improved but remained solidly in negative territory for a fourth straight period against a backdrop of a weaker yen and rising stocks, the latest Reuters poll showed on Monday.

The poll's JGB bull-bear diffusion index, calculated by subtracting the number of bearish market players from those who are bullish, came in at minus 17, improving from minus 29 in the previous survey.

The median forecast for the benchmark 10-year JGB yield at the end of this week came in at 0.730 percent, below the last survey's forecast of 0.770 percent but 1 basis point above Friday's closing level of 0.720 percent, which was its lowest since Dec. 14.

The survey found that 38.9 percent expect JGB yields to rise, down from 47.1 percent in last week's survey. Those expecting yields to move sideways rose to 38.9 percent from 35.3 percent, while 22.2 percent of respondents expected yields to fall, up from 17.6 percent in the previous survey.

On Monday, the 10-year JGB yield added 1.5 basis points to 0.735 percent, while the benchmark 10-year JGB futures contract skidded 0.21 point to 144.34.

Early on Monday, the dollar touched a fresh 2-1/2-year high of 91.26 yen. The Nikkei share average opened higher, hitting a 32-month high above 11,000.

Adding to upward pressure on JGB yields, U.S. Treasuries yields surged to their highest in three weeks on Friday after data showed European banks are repaying more emergency loans than expected.

But JGBs remained underpinned by the Bank of Japan's monetary policy. Last week, the BOJ doubled its inflation target to 2 percent and made an open-ended commitment to buying assets from next year.

Some survey respondents also expected JGB supply/demand conditions to support JGBs as the end of Japan's fiscal year is approaching at the end of March.

The online survey of 96 JGB market participants from major institutions received 36 responses, for a response rate of 37.5 percent. These included 15 "real money" investors from institutions such as banks, pension and investment funds and insurance companies.

The latest survey was conducted from Friday to 8:00 a.m. on Monday (2300 GMT on Sunday).

(Reporting by Yoshiyasu Shida; Writing by Lisa Twaronite; Editing by Richard Pullin)