JGB futures dip on Treasuries, await 10-year auction

TOKYO, Nov 5 (Reuters) - Ten-year Japanese government bond futures edged lower on Thursday hurt by falls in longer-term U.S. Treasuries the previous day, and as market players braced for a 10-year JGB auction the same day.

* The Ministry of Finance is due to offer 2.1 trillion yen ($23 billion) in 10-year JGBs later on Thursday. Market players expect MOF to offer the bonds as a re-opening of the 303rd 10-year JGB with a coupon rate of 1.4 percent, up from 1.3 percent at the previous 10-year auction.

* While there is likely to be some demand from dealers looking to cover short positions, it is unclear how strong investor demand will be, said Takafumi Yamawaki, interest rate strategist at BNP Paribas Securities.

* "Everybody is wary," Yamawaki said, adding that a number of weak auctions in October were still on market players' minds. The key point is whether investors are willing to buy with 10-year yields having risen back near the psychologically key 1.4 percent, he added.

* Lead December 10-year JGB futures fell 0.13 point to 137.83 2JGBv1. A fall to below 137.64 would take the 10-year futures to their lowest in nearly three months.

* Benchmark 304th 10-year JGB was untraded, but the 303rd 10-year JGB yield rose 1.5 basis points to 1.420 percent JP03030067=JBTC.

* Weakness in Tokyo share prices .N225 was lending some support to JGBs, said Yamawaki at BNP Paribas. The Nikkei 225 was down 0.4 percent.

* The U.S. Federal Reserve held interest rates steady near zero percent on Wednesday and reiterated rates would remain low for an "extended" period. [ID:nN04453484]

* Longer-dated U.S. Treasury debt prices fell on Wednesday on worries over massive amounts of pending government debt supply. (Reporting by Masayuki Kitano; Editing by Hugh Lawson)