TOKYO, Jan 18 (Reuters) - Japanese government bond (JGB) yields rose for the third consecutive day on Thursday, as the first auction for 20-year JGBs this year saw poor demand.
The 20-year JGB yield climbed 6 basis points (bps) to 1.365%, its highest since Jan. 5.
The 10-year JGB yield was up 4 bps at a one-month high of 0.645%.
The results of Thursday's auction were "not as favourable as expected," said Ryutaro Kimura, fixed income strategist at AXA Investment Managers.
While the bid-to-cover - a common measure of demand at auctions - was "not bad" at 3.13, it was mostly due to a reduction in the amount of 20-year bonds sold, he said.
The tail, which subtracts the lowest price at the sale from the average price, came in long at 0.24 yen, suggesting weak demand.
The auction was the first since Japan's Ministry of Finance announced it would sell fewer amounts of 20-year bonds this year, reflecting weaker demand for long-dated debt.
"Although the possibility of policy changes by the BOJ (Bank of Japan) this month is very low, many investors may not want to take risks before next week's policy meeting," Kimura added.
Yields also received extra support on Thursday from a jump in their U.S. Treasury peers overnight.
The 30-year JGB yield surged 8.5 bps to 1.705% and 40-year JGB yield rose 7.5 bps to 1.930%, their highest in a month.
The five-year yield was up 3.5 bps at 0.240%.
The two-year JGB yield edged up 1 bps to 0.030%, after sinking into negative territory on Monday.
JGB yields fell broadly to multi-month lows earlier this week, as expectations of an imminent exit from the Bank of Japan's (BOJ) negative interest rate policy at its January meeting next week have faded.
The focus instead will be on any hints BOJ Governor Kazuo Ueda drops about the bank's path at the press conference following the meeting.
(Reporting by Brigid Riley; Editing by Mrigank Dhaniwala)
