JGBs slip as traders hedge positions ahead of auction
TOKYO, June 12 (Reuters) - Japanese government bond prices fell on Wednesday, erasing earlier gains as traders hedged their positions ahead of an auction of 300 billion yen long-term bonds.
* The 10-year JGB futures fell 0.28 point to 142.29, giving up earlier gains to 142.78 while the yield on the 10-year JGBs rose 1.0 basis point to 0.880 percent .
* The market had risen earlier on the back of a fall in Tokyo share prices. But pre-auction selling linked to traders hedging their positions emerged after 10:10 a.m. (0110 GMT), when the BOJ announced its offer to buy bonds, which did not include buying in five to ten year maturities.
* The Ministry of Finance offered to reopen 300 billion yen ($3.1 billion) of existing 20-, and 30-year JGBs. The results of the auction are due at 12:45 p.m. (0345 GMT).
* The downturn in the market extends losses on Tuesday, when the Bank of Japan held off on taking additional measures, disappointing investors who were expecting the central bank to extend the maximum duration of cheap fixed-rate funds as a way to reduce volatility in the bond market.
* Still, short- and medium-term bonds stayed relatively stable, with the five-year yield up 1.0 basis point to 0.320 percent, still far below two-year high of 0.455 percent hit in May.