JGBs edge lower, taking cues from Nikkei, U.S. yields

TOKYO, May 9 (Reuters) - Japanese government bonds edged down on Monday as Japanese equities firmed, though trading was cautious ahead of the next day's 10-year auction.

The Nikkei stock index ended up 0.7 percent, as the yen moved away from an 18-month high scaled last week.

JGBs also took cues from U.S. Treasuries that fell on Friday after jobs data showed signs of wage growth, which could be an early sign that inflation may finally be strengthening, as well as comments from a top Federal Reserve official saying that two U.S. interest rate hikes this year were still possible.

The Bank of Japan bought 790 billion yen of 1- to 5-year JGBs and 400 billion yen of super-long JGBs under its asset purchase programme on Monday.

The benchmark 10-year JGB yield rose 1 basis point to minus 0.110 percent, while the 10-year JGB futures contract ended down 0.07 point at 151.83.. On Tuesday, Japan's Ministry of Finance will auction 2.4 trillion yen of 10-year JGBs.

The 20-year JGB yield added 1 basis point to 0.235 percent , after earlier nudging down to as much as 0.220 percent, a fresh low.

(Reporting by Tokyo markets team; Editing by Sunil Nair)