TOKYO, Jan 10 (Reuters) - Benchmark 10-year Japanese government bond (JGB) yields sprang back from three-week lows on Wednesday, after an auction of the securities saw the weakest demand in nearly four years.
The yield was at 0.575% as of 0453 GMT, 0.5 basis point (bp) below Tuesday's close, but recovering from a Dec. 20 low of 0.56% earlier in the session.
Benchmark 10-year JGB futures were up 0.06 yen at 147.11, after earlier advancing as much as 0.26 yen to reach the highest since July 28.
Bond yields move inversely to prices.
Japanese bond yields have been falling since the start of this year after an earthquake on New Year's Day ravaged the Noto penisula region northwest of Tokyo, quashing bets for an imminent end to the Bank of Japan's stimulus.
"Investors were expecting a weak auction in the first place, but the result was even weaker than that," said Shoki Omori, chief Japan desk strategist at Mizuho Securities.
One reason for the weak result was that with yields falling again in the morning, brokers were forced to cover short positions by buying bonds ahead of the auction, reducing demand at the sale itself, Omori said.
"This is really important, because it's the first 10-year auction of the year," Omori added. "Investors will now be expecting the same from the 30-year auction on Friday."
The 30-year yield was down 1.5 bps at 1.58%, after earlier dropping to a two-week trough at 1.565%. Twenty-year bonds were yet to trade.
The five-year yield was flat at 0.185%, recovering after slipping to a five-month low of 0.18%.
The two-year yield was flat at 0.020%. (Reporting by Kevin Buckland; Editing by Varun H K)
