* Profit-taking ahead of next wk's 10-yr debt auction
* Ten-year yield posts biggest 1-day rise in 2 years
* 20-, 30-yr yields in biggest qtrly fall since late 2008
By Dominic Lau
TOKYO, March 29 (Reuters) - Yields on 10-year Japanese government bonds bounced from a near-decade low on Friday in their biggest one-day rise in two years, as investors took profits ahead of next week's auction of the same maturity and a closely watched Bank of Japan policy meeting.
Mounting expectations that the central bank, under new governor Haruhiko Kuroda, will embark on aggressive monetary easing have sent yields on JGBs tumbling this quarter.
Even with Friday's rebound, the yield on the benchmark bond is down 23 basis points in January-March from the previous quarter, its biggest quarterly fall in nearly three years.
The 20- and 30-year yields have posted even steeper falls, their biggest quarterly declines since October-December 2008, when the global economy was reeling in its worst recession since the Great Depression in the 1930s.
And unlike the 10-years, yields on superlong bonds fell due on Friday to buying by pension funds on the last trading day of Japan's financial year.
"There are two kind of players out in the market. One obviously is the big buyer in the long-end of the curve. It's month-end today. There are a lot of pension funds still have assets allocated in JGBs," said Tomohisa Fujiki, interest rate strategist at BNP Paribas in Tokyo.
He added that profit-taking at short-end of the curve was also helped by relief that a feared bank run in Cyprus did not materialise.
The 10-year yield climbed 5.5 basis points to 0.565 percent, off its lowest level in nearly 10 years. In June 2003 it plumbed a record low of 0.430 percent on the back of quantitative easing by the BOJ.
"We have the BOJ next week - we don't know what kind of outcome that will have. We have the 10-year auction, we have nonfarm payrolls. It's good to take some profit right here," said Tadashi Matsukawa, head of fixed-income at Pinebridge Investments in Tokyo.
"This is probably a temporary market adjustment. It all depends on what the BOJ is going to do next week or at its meeting at the end of April."
BOJ THE KEY
A two-day BOJ policy meeting starts on Wednesday, with another scheduled for later in the month, while the United States will release its key jobs report on April 5.
The Ministry of Finance is set to sell 2.4 trillion yen ($25.5 billion) of 10-year bonds on Tuesday.
BNP Paribas's Fujiki said the bank remained upbeat on JGBs, expecting the 10-year yield to test 0.40 percent in April-June.
Ten-year JGB futures shed 40 ticks to 145.46 to a one-week low after hitting a record high of 145.98 in the previous session. Trading volume hit a three-week high, with 38,938 contracts changing hands.
The 20-year yield slipped 2 basis points to 1.385 percent for the day. It fell to 1.360 percent to a near-decade low for the second day in a row earlier in the session.
It has dropped 37 basis points this quarter, logging its sharpest three-month fall since late 2008.
Societe Generale said investors should take profits on the 20-year sector over the month-end and ahead of next week's BOJ meeting.
The 30-year yield eased 5.5 basis points to 1.505 percent after earlier touching a near-decade trough of 1.500 percent. It was down 47 basis points since the beginning of January, also its biggest quarterly fall since October-December 2008.