TOKYO, Dec 16 (Reuters) - Japanese government bond prices mostly fell on Wednesday, with the two-year JGBs at their lowest in more than a week, following tepid results of a bond operation by the Bank of Japan. The Bank of Japan maintained the size of all of its JGB buying operations on Wednesday, purchasing 1- to 3-year notes worth 500 billion yen, as well as 3- to 5-year JGBs and 5- to 10-year maturities worth 420 billion yen each. Benchmark 10-year JGB futures fell 0.07 point to 152.09, with a trading volume of 13,577 lots, while the 10-year JGB yield rose 0.5 basis point to 0.005%. The 20-year JGB yield fell half-a-basis point to 0.375%, while the 30-year JGB yield rose half-a-basis point to 0.625%. The 40-year JGB yield was unchanged at 0.670%. At the shorter end of the curve, the two-year JGB yield added 1 basis point to minus 0.135%, hitting its highest since Dec. 7, while the five-year yield rose half-a-basis point to minus 0.125%. ADVERTISEMENT The market was caught between fading worries over debt issuance back home and expectations of more U.S. fiscal stimulus. Japan’s cabinet on Tuesday approved a third supplementary budget to fund a fresh $708 billion stimulus package, which would be financed with a new bond issuance worth 22.4 trillion yen. But market worries over debt supply eased as the finance ministry kept its calendar-based JGB market issuance unchanged at 212.3 trillion yen. Meanwhile, optimism over a $1.4 trillion U.S. spending package dimmed the safe-haven appeal of debt, after House of Representatives Speaker Nancy Pelosi and other top congressional leaders met to hammer out a deal to be enacted this week. (Reporting by Tokyo markets team, Editing by Sherry Jacob-Phillips)
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