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JGBs gain, taking cue from slumping equities

TOKYO, May 26 (Reuters) - Japanese government bonds gained on Thursday, shrugging off the effect of the previous session's lackluster 40-year auction as slumping stock prices gave bond market sentiment a lift.

The 10-year cash JGB yield fell one basis point to a one-week low of 0.035 percent, while 10-year JGB futures added 0.17 point to 150.73.

The 20-year JGB yield shed 1.5 basis points to 0.555 percent , while the 30-year JGB yield also fell 1.5 basis points to 0.795 percent.

Japanese shares extended their early losses as the yen's gains on the dollar accelerated, with the Nikkei stock index ending down 0.6 percent as the dollar tumbled 0.4 percent to 111.42 yen.

A smaller-than-forecast rise in core consumer prices helped underpin JGB market sentiment.

Core consumer prices rose 0.3 percent in April from a year earlier to mark a fourth straight month of increases but fell short of the median market forecast for a 0.4 percent gain.

The amounts of the BOJ's JGB purchases on Friday were in line with market expectations, and included 450 billion yen ($4.04 billion) of five- to 10-year JGBs, 200 billion yen of 10- to 25-year JGBs and 100 billion yen of JGBs maturing in more than 25 years.

Investors awaited the details of the Bank of Japan's regular bond-purchasing operations for June, which will be announced next week. ($1 = 111.4600 yen) (Reporting by Tokyo markets team; Editing by Simon Cameron-Moore)