* 10-yr futures edge higher after rangebound trade
* Superlongs slightly higher; duration buying expected
* 10-yr cash bond yield flat, just 3 bp above 9-year low
TOKYO, May 30 (Reuters) - Japanese government bonds were little changed on Wednesday, sticking close to their recent ranges as continuing fears about the euro zone’s debt crisis made investors hesitant to sell, even as low yields discouraged others from making new bets.
Later on Wednesday, the European Commission will set out its economic strategy for the euro zone as it balances growth with austerity steps, even as fears grow about Spain’s ability to fund its debt.
Weaker equity markets, which usually send investors scurrying to the haven of fixed-income assets, failed to spur much buying interest in JGBs.
“Futures didn’t move much today, considering that stocks are weak across Asia. Yields are low, so investors have little incentive to push them lower with no new trading factors,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank.
The 10-year JGB futures contract ended up 0.02 points at 143.43, after moving in a narrow range between 143.38 and 143.46, but holding above their 14-day moving average at 143.28.
The benchmark 10-year JGB yield was flat at 0.845 percent, just 3 basis points above its nearly nine-year low of 0.815 percent set on May 18.
Fanning fears about some European countries’ ability to fund their debt, Egan-Jones Ratings cut Spain’s credit to B from BB-minus, the third downgrade from the agency in less than a month.
Spain will soon issue new bonds to fund its efforts to prop up its financial sector and regional economies, raising worries about whether it will be able to sustain its borrowing as costs rise.
The superlong sector edged higher, leading the yield curve to slightly flatten.
Investors often buy longer-term assets at the end of a month, to extend the duration of their portfolios, and some strategists say this buying could pick up on Thursday.
The 30-year bond yield fell half a basis point to 1.795 percent, while the yield on the 20-year bond fell half a basis point to 1.640 percent
The spread between 10-year and 20-year yields narrowed to 79.5 basis points from a year high of 80.5 on a last-traded basis.
Underpinning JGBs, Bank of Japan Deputy Governor Hirohide Yamaguchi said the central bank will not rule out further monetary easing if risks in Europe exert strong downward pressure on Japan’s economy, according to a report on Wednesday in the Nikkei business daily.
BOJ Governor Masaaki Shirakawa said on Wednesday that he disagreed with the view among some economists that Japan’s current account balance will turn into a deficit over time, and said the country will continue to run a current account surplus for the time being.