TOKYO, May 19 (Reuters) - Japanese government bond (JGB)

prices slipped on Tuesday, erasing early gains, as investors

awaited details of the government's planned extra budget and the

Bank of Japan's upcoming policy decision.

The benchmark 10-year JGB price weakened, sending its yield

up 4.5 basis points (bps) to 2.785% from an

intraday low of 2.710%. The five-year note also

reversed course, with its yield rising 2.5 bps to 2.010%, after

dipping to 1.985% earlier in the session.

Yields move inversely to bond prices.

"The firm outcome of the five-year bond auction in the

previous session helped investors to buy back bonds, so the

yield trimmed rises on Monday and that trend continued till this

morning," said Masahito Sugawara, senior strategist at Daiwa

Securities.

"The declines in yields were short-lived because investors

bought bonds only to cover short positions," he added.

JGBs have remained under pressure as higher oil prices

fuelled inflation concerns and reinforced expectations that the

central bank will raise interest rates faster than previously

anticipated.

Most maturities came under renewed selling pressure for a

seventh consecutive session as investors awaited details of the

government's extra budget plans.

Japan's government is likely to issue fresh debt as part of

funding for a planned extra budget to cushion the economic blow

from the Middle East war, a government source with direct

knowledge of the deliberations told Reuters on Monday.

Market sentiment was also weighed down by an upcoming

auction of 20-year bonds, strategists said.

Investors are also cautious ahead of the BOJ's policy

meeting in June, where the central bank is expected to release

its economic outlook and update plans for bond purchases.

The BOJ, which has been reducing monthly amounts of bond

purchases since 2024, is set to update the pace of the reduction

beyond March 2027.

Elsewhere, the 20-year JGB yield inched up

0.5 bps to 3.720%, while the 30-year yield rose 3

bps to 4.130%. The 40-year JGB yield rose 1 bp to

4.355%.