TOKYO, Aug 31 (Reuters) - Japanese government bond prices edged lower on Thursday as a rise in domestic equities dented the appeal of debt, although the short-end held firm after a two-year auction managed to attract ample demand.
The five-year yield rose half a basis point to minus 0.135 percent.
The 10-year yield was up 1 basis point at 0.010 percent.
The 10-year yield had slipped to a four-month low of zero percent on Tuesday following a missile launch by North Korea. But it has since edged back up amid an ebb in broader risk aversion, with the Nikkei gaining 0.8 percent on Thursday.
The bid-to-cover ratio, a gauge of demand, at Thursday's 2.2 trillion yen ($19.9 billion) two-year JGB auction was at 4.97, compared to an average of 4.75 from the past 12 auctions.
Analysts said the new two-year JGBs drew ample bids amid signs of foreign investor demand for short- to mid-term bonds picking up again.
The two-year yield dipped half a basis point to minus 0.160 percent.
($1 = 110.48 yen) (Reporting by the Tokyo markets team; Editing by Sunil Nair)