* JGB 10-year yield hits 1-month low of 1.430 percent
* Nikkei's 4 percent fall spurs JGB buying
* Twenty-year JGBs edge up before MOF auction
By Masayuki Kitano
TOKYO, Nov 20 (Reuters) - Ten-year Japanese government bond
yields fell to a one-month low on Thursday as fears of a global
recession and a slide in Tokyo share prices bolstered demand for
safe-haven government debt.
JGBs also got a boost after U.S. Treasuries rallied the
previous day on firming bets that the Federal Reserve will cut
rates as the economy worsens and market players dumped risky
assets and sought safety in Treasuries.
"JGBs are following the trend seen overseas, where bonds rose
and equities fell," said Shinji Ebihara, a quantitative analyst
for Mizuho Securities.
Data released on Thursday showed that Japan's exports logged
their biggest annual decline in seven years in October,
reinforcing worries the global financial crisis may push the
economy deeper into recession.
Exports to Asia declined for the first time since 2002, while
China-bound shipments also fell, that data showed.
The 10-year JGB yield fell 1.5 basis point to 1.450 percent
after dropping earlier to 1.430 percent, the lowest since early
October.
December 10-year JGB futures rose 0.28 point to 139.11. They
rose as high as 139.34 earlier, the highest in a month.
In the stock market, the benchmark Nikkei share average slid
4 percent.
A near-term focal point is the Ministry of Finance's auction
of 900 billion yen ($9.42 billion) in 20-year JGBs later on
Thursday. The offer amount has been increased by 100 billion yen
from 800 billion yen at the previous offer in October.
The MOF said it was offering the 20-year paper as a
re-opening of the 105th 20-year JGB with a coupon of 2.1 percent.
Despite the increased issuance amount, demand at the auction
is unlikely to be too weak because dealers are looking to cover
short positions in 20-year JGBs, said Ebihara at Mizuho
Securities.
The MOF announced in October that it would increase the
monthly issuance amount of 20-year JGBs for November to March as
part of a move to scrap the issuance of 10-year inflation-linked
and 15-year floating-rate government bonds for the rest of 2008.
The 106th 20-year JGB yield fell 3 basis points to 2.110
percent.
(Reporting by Masayuki Kitano; Editing by Chris Gallagher)
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