TOKYO, Jan 5 (Reuters) - Japanese government bond prices firmed on Thursday after an auction of 10-year JGBs attracted solid bids despite their relatively expensive levels.
The benchmark 10-year JGB yield dipped 0.5 basis point to 0.055 percent, off two-week high of 0.065 percent touched on Wednesday.
The auction of 2.4 trillion yen 10-year JGBs drew strong demand, with the tail, or the gap between and the lowest and average prices, shrinking to 0.03 from 0.08 in previous, indicating tight demand.
Although the 10-year zone is perceived to be a bit expensive compared to other maturities, the Bank of Japan's explicit commitment to keep the yield around zero percent is helping to underpin demand, market players said.
The shorter end of the curve is also well-supported, with two-year yield dipping 0.5 basis point to minus 0.200 percent , a three-week low.
The price of 10-year JGB futures rose 0.13 point to 150.17 by late afternoon trade. (Reporting by Tokyo Markets Team; Editing by Amrutha Gayathri)