JGBs fall as investors wary before 10-yr sale, Fed

* JGBs fall on investor caution before 10-year auction

* Investors also awaiting Fed's rate decision

* Market trims some losses as Nikkei slides

* Global growth concerns continue to lend support to JGBs

By Chikako Mogi

TOKYO, Aug 4 (Reuters) - Japanese government bonds fell on Monday, pulling the benchmark 10-year yield away from three-month lows, as investors grew wary of buying ahead of a key auction the next day.

Market players were also reluctant to take big positions before the Federal Reserve's policy decision due on Tuesday and a post-meeting statement.

Investors are taking a wait-and-see stance until key events are out of the way, because they are not in a hurry to buy now when JGB yields are likely to fall on growing concerns about Japanese, U.S. and euro zone growth, traders said.

"The 10-year zone is weak but shorter maturities are firm, so prices are clearly falling on hedging against the 10-year JGB auction," said Kenro Kawano, a senior interest-rate strategist at Credit Suisse.

The JGB market trimmed some losses as the Nikkei share average .N225 fell 1 percent.

September 10-year JGB futures fell 0.13 point to 136.59 2JGBv1, off the day's low of 136.46. Futures matched a three-month high of 136.86 set in the evening session on Friday.

Volume remained thin at 16,345 lots.

The 10-year JGB yield underperformed the rest of the curve, rising as high as 1.540 percent before easing to 1.535 percent JP10YTN=JBTC, up 2.5 basis points on the day. The yield fell to a three-month low of 1.505 percent on Friday.

The two-year yield outperformed, with the yield JP2YTN=JBTC easing 1 basis point to 0.750 percent.

"Prices are already at the higher end of recent ranges and investors have no reason to buy now before the 10-year JGB auction and the Fed meeting," said a dealer at a Japanese bank.

"Investors don't want to push 10-year yields below 1.5 percent before the auction, as yields are expected to gradually inch lower given the bleak growth outlook for the Japanese, U.S. and euro zone economies," he said.