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TOKYO, March 14 (Reuters) - Benchmark Japanese government bonds edged higher on Tuesday after decent demand at an auction of 20-year JGBs, with trading stuck in narrow ranges ahead of the Bank of Japan's policy meeting this week.
The benchmark 10-year JGB yield inched down 0.5 basis point (bp) to 0.080 percent, while 10-year JGB futures ended up 0.08 point at 149.98.
The yield on 20-year JGBs was flat at 0.670 percent.
The Ministry of Finance offered 1.1 trillion yen ($9.58 billion) of 20-year JGBs with a 0.7 percent coupon, and 32.8473 percent of bids were accepted at the lowest price of 100.35.
The sale drew bids of 3.78 times the amount offered, suggesting solid demand, but lower than the previous sale's bid-to-cover ratio of 4.05 times. The tail between the average and lowest accepted prices widened to 0.11, compared with that of last month's offering at 0.04.
The finance ministry will trim the amount offered in its monthly 20-year bond auctions to 1 trillion yen in the fiscal year that begins in April from the current 1.1 trillion yen, which underpinned demand for the bonds.
The BOJ is widely expected to hold policy steady on Thursday, and stress that inflation is nowhere near levels that justify talk of withdrawing its massive stimulus.
Ahead of that, the U.S. Federal reserve is expected to raise interest rates at its two-day meeting concluding on Wednesday.
$1 = 114.8200 yen Reporting by Tokyo markets team; Editing by Amrutha Gayathri