By Masayuki Kitano

TOKYO, Nov 4 (Reuters) - Ten-year Japanese government bond

futures edged lower on Wednesday as traders returned from a

holiday, taking their cue from falls in U.S. Treasuries over the

past couple of trading sessions.

Cash JGBs mostly eased, although the benchmark 304th 10-year

bucked the trend and held firm, with market players saying the

benchmark bond was in demand in the JGB repo market, where

dealers can borrow bonds in exchange for cash.

Moves in JGBs were subdued overall, with market players

awaiting the U.S. Federal Reserve's policy decision later on

Wednesday and a 10-year JGB auction on Thursday.

'It is not as if people are trying to sell or buy very

actively. The market is a bit weak because of the declines in

U.S. Treasuries,' said Shinji Ebihara, a quantitative analyst for

Mizuho Securities.

Lead December 10-year JGB futures dipped 0.12 point from

their close on Monday to 138.15. The Tokyo JGB market

was closed on Tuesday due to a Japanese national holiday.

The benchmark 304th 10-year JGB dipped 1 basis point to 1.365

percent.

The 304th 10-year JGB may be attracting more demand from

investors compared to other bonds with similar maturities because

it is the newest issue, and that may be why that particular bond

is in demand in the repo market, said Ebihara at Mizuho

Securities.

Yields in other JGB maturities inched higher, with the

20-year yield edging up 1 basis point to 2.100 percent and the five-year yield clawing up 0.5 basis point

to 0.650 percent.

U.S. Treasuries have fallen this week, hurt by a

stronger-than-expected reading in the Institute for Supply

Management's factory index and as traders prepared for

Wednesday's Treasury refunding announcement and a Federal Reserve

policy decision.

JGBs have had some reprieve this month after they were sold

off in October, when they retreated on worries about the size and

details of debt issuance for the rest of this fiscal year and

next.

The benchmark 10-year JGB yield climbed 11 basis points in

October, its biggest one-month rise since May 2008, and hit a

2-?? month high of 1.425 percent last Friday.

The MOF said last week that it would increase its issuance of

JGBs to the market for the fiscal year to March 2010 by 2.1

trillion yen ($23.23 billion) to 132.3 trillion yen, to offset

weak demand for JGBs among retail investors.

Investors are bracing for the possibility of further

increases in debt issuance this fiscal year to offset an expected

tax revenue shortfall, although some analysts reckon that the

bulk of any extra issuance to the market may be concentrated in

short-term JGBs.

Japanese Finance Minister Hirohisa Fujii reiterated on

Wednesday that the government would issue extra bonds to respond

to a sharp fall in tax revenues in the year to next March.

Fujii had already said the government could issue more bonds

for the fiscal year to next March as tax revenues are likely to

fall 6 trillion yen ($66 billion) or more below an initial

estimate of 46 trillion yen.

There is also uncertainty about the size and details of JGB

issuance to the market next fiscal year, which starts in April.

($1=90.38 Yen)

((masayuki.kitano@thomsonreuters.com; Reuters Messaging:

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Keywords: MARKETS JAPAN JGB

Double-click on brackets for following items:

JGB historical auction results

JGB benchmark data from JBTC brokers' broker

JGB composite data from Reuters

JGB long and super-long sectors (OTC)

JGB medium-term sector (OTC)

JGB futures composite

Japanese debt Speed Guide

Yen currency/swaps/derivatives Speed Guide

JGB closing prices/yields from brokers' broker

Lead 10-year JGB futures on TSE

10-year JGB futures on TSE (day session)

10-year JGB futures on TSE (night session)

10-year JGB futures on LIFFE

10-year JGB futures on SIMEX

10-year JGB future options on TSE

Tokyo Mitsubishi Securities yen bond index

TIFFE euroyen futures

SIMEX euroyen futures

CME euroyen futures

Yen OIS from Meitan Tradition

Yen OIS on BOJ meetings from Meitan Tradition

Yen OIS from Totan Capital

Yen TIBOR (Tokyo interbank offered rate)

Yen LIBOR (London interbank offered rate)

Yen interest rate swaps contributed

Yen interest rate swaps from Totan Capital

World yields summary

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