TOKYO, Nov 26 (Reuters) - Japanese government bond (JGB) prices edged higher on Thursday, in response to a surge in their German counterparts brought about by reinforced expectations of further policy easing by the European Central Bank (ECB).
A regular JGB-buying operation by the Bank of Japan also supported prices.
The 30-year and 20-year JGB yields both dipped half a basis point to 1.380 percent and 1.060 percent, respectively. December 10-year JGB futures gained 0.07 point to 148.60.
The short-end of the yield curve also attracted bids. Underscoring strong investor demand for the maturities, an auction of 3-month bills produced an average yield of -0.0863 percent, the lowest on record.
Investors, notably those from abroad, have been steady purchasers of short-term Japanese notes which now offer relatively attractive yields when converted to U.S. dollars in a popular investment strategy called an asset swap.
Japanese notes offer low yields but appear attractive to those who witnessed German 2-year and even 5-year bund yields drop ever deeper into negative territory.
Bund yields fell to record lows following a Reuters report on Wednesday stating ECB officials were considering options to stagger charges on banks hoarding cash or whether to buy more debt ahead of a policy meeting next week.
(Reporting by the Tokyo markets team)