JGBs have rebounded from a sell-off last week that had driven two-year yields to their highest in two years as investors expect the Bank of Japan to ditch its super-loose monetary policy early next year and possibly also raise rates in 2006.
JGBs were also helped by solid gains in Treasuries last week, as well as a 0.7 percent drop in the Nikkei share average on Monday to 13,106.
December 10-year futures were up 0.17 point to 137.39, up from a 13-month low of 136.49 struck a week ago.
The yield on the benchmark 273rd 10-year note dipped 0.5 basis point to 1.50 percent. It briefly fell as low as 1.485 percent, 10 basis points below a one-year high hit last week, but failed to stay under 1.5 percent.
Analysts said a 10-year yield of 1.5 percent was more than just a psychologically important level for some Japanese investors, as they had set 1.5 percent and above as a target level for buying 10-year notes for the current business half-year ending in March 2006.
Thirty-year yields fell one basis points to 2.370 percent, after falling as far as 2.355 percent, and 20-year yields dipped 0.5 basis point to 2.075 percent, after sliding to 2.07 percent. Traders said investors had turned cautious about snapping up the super-long bonds - notes whose maturities are longer than 10-years - after a recent sharp rally.
Demand for super-long bonds will be tested with Tuesday's 700 billion yen ($6 billion) auction of 20-year paper, to be followed by a sale of two-year notes on Thursday.