JGB futures slip from 2-month peak before auction

TOKYO, March 1 (Reuters) - Japanese government bond futures edged down on Monday, slipping from a two-month peak hit last week, as investors sold bonds to make room in their portfolios before an auction of benchmark 10-year notes the following day.

* The Ministry of Finance will offer 2.2 trillion yen ($25 billion) of 10-year bonds on Tuesday. The debt sale is seen as an important test of demand after the 10-year yield last week dipped below the 1.3 percent threshold for the first time this year.

* Risk aversion in the wake of sovereign credit concerns in the euro zone was one factor that lifted JGB futures to a two-month high. Expectations the Bank of Japan could further ease monetary policy to support Japan's deflation-plagued economy have also helped lift government bonds.

* Some in the Japanese government want the central bank to ease monetary policy more, but adopting a rigid inflation target may not be the way to pull Japan out of deflation, Naoki Minezaki, one of two senior vice finance ministers, told Reuters in an interview on Friday. He also said the government would not be mentioning a sales tax hike when it maps out a long-term fiscal plan in June. [ID:nTOE61P07X]

* March 10-year JGB futures were down 0.07 point at 139.80 2JGBv1. On Friday, the lead contract rose as high as 140.05, its highest since late December.

* The benchmark 10-year yield inched up 1 basis point to 1.305 percent JP10YTN=JBTC, having risen from a two-month low of 1.290 percent hit on Friday. (Reporting by Rika Otsuka; Editing by Chris Gallagher)