JGBs mixed in market lull as US starts talks with trade partners

TOKYO, April 18 (Reuters) - Shorter-dated Japanese government bond yields declined on Friday while super-long yields rose as investors adjusted positions in a period of calm for markets as the U.S. began negotiating tariff deals with top trade partners, including Japan.

The 10-year JGB yield JP10YTN=JBTC fell 0.5 basis point (bp) to 1.3% and the five-year yield JP5YTN=JBTC dropped 1.5 bps to 0.845% as of 0400 GMT, pressured by a slide in European yields on Thursday after the European Central Bank cut rates and hinted at further easing.

U.S. Treasury yields were mixed in a quiet overnight session.

The benchmark 10-year JGB futures 2JGBv1 rose 0.18 yen to 141.02. Bond yields fall when prices rise.

The two-year note JP2YTN=JBTC had not been traded yet.

Shorter-dated tenors have seen yields drop this month as traders bet the Bank of Japan (BOJ) will have to delay rate hikes amid the fallout from aggressive U.S. tariffs.

Mizuho economist Yasunari Ueno said, "There have been a number of recent indications that a rate cut might also be an option for the BOJ," saying BOJ Governor Kazuo Ueda recently suggested an emergency cut "has not been ruled out."

"The likelihood of the BOJ shifting from rate hikes to rate cuts currently seems remote, but we think it should be kept in mind as a risk scenario," Ueno said.

Meanwhile, the 20-year JGB yield JP20YTN=JBTC bounced 3 bps to 2.26%, following a steep three-day drop from a two-decade peak scaled Monday. The 30-year bond JP30YTN=JBTC had yet to trade.

Investors were worried about the debt market repercussions from a potential big government spending package before July's upper house elections.

However, recently, politicians have stepped back from proposals for cash payouts and there have been suggestions for a longer timeline for stimulus.

Trading on Friday was subdued due to the Easter holidays in several major markets outside Japan, including the United States and most of Europe.