

TOKYO, Feb 4 (Reuters) - Japanese government bonds slipped on Monday, with the 10-year yield hitting a three-week high, after U.S. jobs and manufacturing surveys showed a recovery in the world's largest economy remained on track.
U.S. employers added 157,000 jobs last month and 127,000 more jobs were created in November and December than previously reported, while the pace of growth in the U.S. manufacturing sector picked up in January to its highest level in nine months.
'That's the biggest driver on the JGB yields today,' said Yuya Yamashita, rates strategist at J.P. Morgan in Tokyo.
The 10-year yield rose 3 basis points to 0.800 percent, marking its biggest one-day move since Jan. 4.
Ten-year bond futures dropped 38 ticks to 143.68, hitting a three-week low and breaking below their 20-day moving average of 144.06. Monday's drop was their biggest one-day move since Dec. 11.
Yamashita cited Tuesday's auction of 2.4 trillion yen ($25.9 billion) worth of 10-year bonds as another factor for the sector's underperformance on Monday morning.
Yields on 20-year debt added 2 basis points to 1.795 percent to a three-week high. The 30-year yield also put on 1.5 basis points, to 2.00 percent.
Neale Vincent, strategist at Nomura Securities in Tokyo, said near-term trading was likely to be volatile as the short-end of yield curve was supported by the Bank of Japan's asset purchases, while long-dated sectors were pricing in the possibility of higher inflation under Prime Minister Shinzo Abe's push for the central bank to adopt bolder policy action.
'It makes for a volatile and difficult trading environment. The kind of trades that I am recommending are conservative, such as payer butterflies on the 10-year areas,' he said.
'We are anticipating that rates go up to between 1.0 percent and 1.25 percent later this year.'
($1 = 92.6100 Japanese yen)
(Reporting by Dominic Lau; Editing by Simon Cameron-Moore) Keywords: MARKETS JAPAN JGB/
(dominic.lau@thomsonreuters.com)(+81 3 6441 1917)(Reuters Messaging: dominic.lau.thomsonreuters.com@reuters.net)
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