TOKYO, March 29 (Reuters) - Japanese government bond (JGB) yields drifted higher on Friday at the conclusion of the country's fiscal year, while the yen's continued weakness drew fresh warnings of intervention from the finance minister.
Yields on the longest-dated JGBs rose the most, reacting to higher overseas yields overnight, and possibly some end-of-year profit taking as investors closed their books, analysts said.
However, two-year yields declined following solid demand at an auction of the securities.
The yen continued to hover near 152 per dollar, a level that previously spurred yen-buying intervention to support it.
The currency weakened as far as 151.875 on Thursday, sparking the sternest warning from Tokyo since the last intervention in October 2022, with Finance Minister Shunichi Suzuki threatening "decisive steps" to deal with excessive declines.
Suzuki didn't repeat the phrase on Friday, but reiterated officials were watching currency moves "with a high sense of urgency", adding that the speed of moves rather than specific levels were the ministry's focus.
The yen traded at 151.37 per dollar, little changed from Thursday, as of 0600 GMT.
"MOF is pushed into corner, I think," Shoki Omori, chief Japan desk strategist at Mizuho Securities said.
"Volatility is still low, so they are struggling to find a good reason to intervene."
The 10-year JGB yield rose 2 basis points (bps) to 0.725%, while benchmark 10-year JGB futures fell 0.21 yen to end the day at 145.67. Bond yields rise when prices fall.
The 30-year JGB yield advanced 4.5 bps to 1.810%.
The two-year yield, however, eased 1 bp to 0.175%.
The yen and JGB yields have continued to fall despite the Bank of Japan's (BOJ) decision to exit negative interest rate policy last week with its first rate hike since 2007.
"Bias towards higher yields in both shorter and longer tenors remains, given the BOJ is likely going to hike rates again this year," Mizuho's Omori said.
More strong U.S. economic data could also add pressure for higher yields, as Treasury yields increase, he said. The Federal Reserve's preferred inflation gauge, the PCE deflator, is due later on Friday.
Although Japanese officials may not welcome yen weakness, equity investors have.
The Nikkei share average pushed to an all-time high at 41,087.75 on Friday last week, and ended the quarter with its biggest gain on record in absolute terms.
Japan's stock benchmark rallied 12,328 points over the three-month period to close at 40,369.44, a more than 20% surge that has far outpaced the 8.4% rise in the MSCI World index . (Reporting by Kevin Buckland; Editing by Mrigank Dhaniwala)
