JGBs edge higher, pushing 10-year yield to 4-week low
* 10-year JGB yields push bottom of recent range
* Stronger Treasuries prices underpin JGB prices
* 10-yr futures hit highest intraday level since June 10
* 5-yr yield touches five-week low
TOKYO, July 18 (Reuters) - Japanese government bond prices edged higher on Thursday, taking their lead from stronger U.S. debt prices that helped the benchmark yield touch a four-week low. Yields on U.S. Treasuries hit their lowest levels in two weeks on Wednesday after Federal Reserve Chairman Ben Bernanke said there was no committed timetable for the U.S. central bank to scale back its bond purchase program. But many analysts and market participants believe it will take more than stronger U.S. debt prices to nudge JGBs out of the range in which they have doggedly traded since late May. "Even if U.S. yields continue to fall on a correction of excessive expectations for tapering, downward pressure on JGB yields is unlikely to be strong," Barclays Japan strategists said in a note to clients on Thursday. They continued to believe the lower end of the range for the 10-year JGB yield is around 0.8 percent, the note said. The benchmark yield has remained within the range of 0.80 percent and 0.90 percent since late May. In regular operations under its stimulus scheme, the Bank of Japan offered to buy a total of 700 billion yen ($7 billion) of bonds outright on Thursday, consisting of 200 billion yen with durations of one to three years to maturity, 300 billion yen with three to five years, and another 200 billion yen with 10 years and longer. The benchmark 10-year yield slipped one basis point to 0.805 percent, its lowest since June 20. Ten-year JGB futures ended up 0.16 point at 143.38, just a few ticks below their session high of 143.41, their highest since June 10 - after finishing morning trade nearly flat. Volume was thin, rising from the previous session to 19,809 contracts but still shy of the 20,000 level for the third straight session. The five-year yield was also flat at 0.290 percent after falling to a fresh five-week low of 0.285 percent, bolstered by solid demand at the previous session's auction of that maturity.
"There's an election this weekend, so some market participants might be waiting for that to be over before they take new positions," said a fixed-income fund manager at a European asset management firm in Tokyo. "But the election itself is unlikely to present any event risk, so I doubt the market will move much, even after," he added. Prime Minister Shinzo Abe's ruling bloc is expected to win Japan's upper house election on Sunday, handing him more power to pursue his aggressively reflationary policies. While expectations for the success of those policies still supported corporate morale, the Reuters Tankan poll showed on Thursday, many firms complained of sluggish demand, noting the effects of "Abenomics" had yet to be seen.