Japan’s 10-year bond yields flat ahead of U.S. inflation data

TOKYO, May 11 (Reuters) – Japan’s 10-year government bond yields were flat on Wednesday as investors maintained a cautious stance ahead of US inflation data and a domestic 30-year bond auction.

The 10-year JGB yield was flat at 0.245%, hovering just below the upper limit of the Bank of Japan’s yield target.

Investors closely eye the April consumer price index reading later on Wednesday for any signs that inflation may be starting to cool, with expectations calling for an 8.1% annual increase compared with the 8.5% rise recorded in March.

“If US yields fall on expectations that consumer prices have peaked out, that could drive demand for the yen bonds,” said a market participant at a domestic brokerage.

The 20-year JGB yield fell 0.5 basis point to 0.770%.

The 30-year JGB yield dipped 0.5 basis point to 1.025%. The government will hold an auction for the bonds with the same maturity on Thursday.

The two-year JGBs were not traded and the yield  remained at -0.050% and the five-year yield  was flat at 0.015%.

The 40-year JGB yield was flat at 1.130%.

Benchmark 10-year JGB futures rose 0.09 point to 149.28, with a trading volume of 10,557 lots.

(Reporting by Tokyo marekts team; Editing by Sherry Jacob-Phillips)