JGBs steady, less pessimistic BOJ tankan weighs

TOKYO Oct 1 (Reuters) - Japanese government bonds held steady on Thursday, weighed down after the Bank of Japan's key tankan survey showed that corporate sentiment continued improving in July-September but supported as Tokyo stocks lost ground.

* The tankan's headline index for big manufacturers' sentiment improved to minus 33 from minus 48 in the June survey, after hitting a record low of minus 58 in the March survey. The outcome was in line with market forecasts. [ID:nTKF106652]

* Economists said it remained to be seen if corporate sentiment would continue to improve going forward as stimulus from government spending may wear off and as the yen has appreciated sharply recently. [ID:nT65011]

* December 10-year JGB futures 2JGBv1 were flat at 139.34.

* The benchmark 10-year yield JP10YTN=JBTC climbed 0.5 basis point to 1.295 percent. The 20-year yield JP20YTN=JBTC was unchanged at 2.045 percent.

* Market focus was on whether domestic investors would begin Japan's second fiscal half from Thursday by selling bonds to book early profits on their books, and if there were enough bargain hunters to absorb such selling.

* The Nikkei .N225 lost 0.6 percent, tracking a fall on Wall Street. [.T] (Reporting by Shinichi Saoshiro)