TOKYO, May 26 (Reuters) - Japanese government bond yields rose on Thursday, with the yield curve steepening at the longer end, even as investors witnessed a strong outcome of an auction for 40-year notes.
The 10-year JGB yield rose 2.5 basis points to 0.230%, rebounding from a one and a half months low it marked in the previous session.
The 20-year JGB yield jumped 4 basis points to 0.740%.
The auction for 40-year debt received bids worth 2.42 times the amount available, higher than a bid-cover ratio of 2.19 at the previous auction.
"Demand was strong as investors wanted to cover their short positions," said a market participant at a domestic brokerage.
The 40-year JGB yield rose 2.5 basis points to 1.100% and the 30-year JGB yield rose 3 basis points to 0.985%.
The two-year JGB yield rose 0.5 basis point to -0.070%.
The five-year yield rose 1.5 basis points to minus 0.015%.
Benchmark 10-year JGB futures fell 0.18 point to 149.93, with a trading volume of 19,724 lots. (Reporting by Tokyo markets team)
