TOKYO, June 5 (Reuters) - Japan's 30-year government

bond prices rose after an auction of the notes saw its weakest

outcome in one and a half years, in line with market

expectations.

The bid-to-cover ratio, a measure of demand that gauges the

number of bids against the amount of securities on offer, fell

to 2.921, the worst since December 2023, and was down from 3.074

at the prior sale in May.

The auction followed a weak outcome of the 40-year bond sale

last week, and was a gauge for demand in so-called super-long

bonds, which saw heavy sell-offs in May.

"The weak outcome signalled the market has not recovered

from the weakness, with volatilities in yields remaining high,"

said Katsutoshi Inadome, senior strategist at Sumitomo Mitsui

Trust Asset Management.

The poor auction results would add pressure on the finance

ministry to reduce the issuance of bonds with super-long

maturities.

Such expectations rose after Reuters reported last week the

Ministry of Finance is considering reducing its sales of

super-long bonds.

The ministry could reduce the sale amounts as early as July,

after hearing opinions from primary dealers at a meeting

scheduled later this month, strategists said.

Sentiment will be weak as long as the scale of expected cuts

remains unclear, they said.

The 30-year JGB yield was last down 7 basis

points at 2.875%, extending the decline of 5.5 bps before the

auction. Bond yields move inversely to prices.

"The yields fell so much ahead of the auction because some

investors bought the 30-year bonds, expecting that the auction

outcome would be good," Inadome said.

The 10-year JGB yield fell 3.5 bps to 1.465%

and the five-year yield fell 2 bps to 1.02%.