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Benchmark JGBs inch down; next week's 20-year sale eyed

TOKYO, Oct 12 (Reuters) - Benchmark Japanese government bonds were set to end their three-session gaining streak on Friday, as investors were hesitant to chase prices higher after yields closed at a nine-week low in the pervious session.

* The benchmark 10-year yield rose half a basis point to 0.755 percent, after closing its lowest level since Aug. 7 on Thursday.

* Ten-year JGB futures ended morning trade down 0.04 point at 144.29, after earlier nudging up to 144.34, which was their highest level since Aug. 7.

* A 30-year bond sale on Thursday met strong demand, raising some investors' hopes for next Thursday's 20-year sale, but others were concerned that next week's sale will fall short of expectations.

* "The 30-year was undervalued so demand was strong, but 20-year JGBs aren't as attractive, and they're also not as appealing to those who are actively buying in the 10-year sector because they are too long for investors just seeking carry," said a fixed income fund manager at a Japanese asset management firm in Tokyo.

* The superlong tenor was steady, with yields on 20-year bonds flat at 1.645 percent and yields on 30-year debt also flat at 1.920 percent.

* Rating agency Moody's Investors Service's senior vice president and regional credit officer Tom Byrne told reporters on Friday that Japan's politicians still have some time to bring down debt as government bond yields are likely to remain low and the current account balance is likely to remain in surplus for the time being.

* Japanese Economics Minister Seiji Maehara said he will discuss the pain a strong yen is inflicting on exports when he meets later on Friday with U.S. Federal Reserve Chairman Ben Bernanke and European Central Bank President Mario Draghi, who are in Tokyo for the International Monetary Fund meetings.

(Reporting by Lisa Twaronite; Editing by Eric Meijer)

((lisa.twaronite@thomsonreuters.com)(81 3 6441 1870 Reuters Messaging: lisa.twaronite.thomsonreuters.com@reuters.net))

Keywords: MARKETS JAPAN JGB/