TOKYO, May 7 (Reuters) - Japanese government bonds

(JGBs) rallied on Thursday as domestic markets reopened after a

trading break that saw the yen appreciate on suspected

intervention by authorities in Tokyo.

The five-year yield fell 0.5 basis points

(bps) to 1.870%. The yield on the 40-year JGB,

Japan's longest tenor, fell 3 bps to 3.935%. Yields move

inversely to bond prices.

Other tenors had yet to trade as Japan reopened after a

three-day break. Japan's top currency diplomat Atsushi Mimura

said he continued to closely watch the foreign exchange market

and that he was in daily contact with U.S. authorities.