JGBs snap three sessions of gains as investors take profits

* 10-yr yield pulls away from previous session's 9-week low

* Futures extend losses in afternoon

By Lisa Twaronite

TOKYO, Oct 12 (Reuters) - Japanese government bonds rose for the first time in four days, as investors took profits after benchmark yields closed at a nine-week low in the previous session.

The benchmark 10-year yield rose 1.5 basis points to 0.765 percent.

Ten-year JGB futures extended losses in afternoon trading, with selling by hedge funds cited, and ended down 0.11 point at 144.22. Futures closed the morning session at 144.29 after nudging up to 144.34, which was their highest level since Aug. 7.

"The JGB market followed the Treasury market overnight, which makes sense. If overseas yields keep declining in a range, then JGBs will follow suit," said Maki Shimizu, senior strategist at Citigroup Global Markets Japan.

U.S. Treasuries rose on Thursday and were supported in Asia on Friday, with the benchmark 10-year yield staying near this week's low, as investors worried about corporate earnings and the outcome of the U.S. presidential election.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Asset performance in Q3: IMF cuts forecasts: Euro debt crisis: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

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.

But Byrne warned that a stand-off between Japan's government and opposition parties is a concern as it has stalled important legislation needed to fund government spending.

For now, those political risks have taken a backseat to concerns about the impact of Europe's crisis on global growth, which has stoked demand for safe-haven fixed income assets.

"It's hard to price in the fiscal risk, unless it becomes more recognizable. It's more the global slowdown, penetrating the market," said Citigroup's Shimizu.

A 30-year bond sale on Thursday met strong demand, raising some investors' hopes for next Thursday's 20-year auction, 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.

Superlong bonds also lost ground on Friday, with yields on 20-year bonds up 1 basis point at 1.655 percent and yields on 30-year debt up half a basis point at 1.925 percent.

The Ministry of Finance will also offer 5-year notes on Tuesday.

(Editing by Edwina Gibbs)

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