TOKYO—Japanese government bond yields fell as investors moved out of stocks for the safety of bonds.
But the moves were limited by caution ahead of auctions of five-year and 20-year government debt later in the week.
The benchmark 10-year yield dropped 0.015 percentage point to 1.28% as the Nikkei Stock Average dropped 2.2% to 10235.76, its lowest close since March 4.
The government plans to auction 2.4 trillion yen ($26 billion) of five-year paper Tuesday and 1.1 trillion yen of 20-year bonds on Thursday. The five-year yield hit an intraday low of 0.44%, its lowest level in early five months, before ending at 0.445%. Analysts say Tuesday's sale will be a key test of investor demand at such levels.
"If this week's auctions go without any big problems, JGB prices are likely to stay around where they are now," said Mari Iwashita, chief market economist at Nikko Cordial Securities.
She predicted the 10-year yield would move between 1.25% and 1.35% this week.
Write to Megumi Fujikawa at megumi.fujikawa@dowjones.net
