JGBs sag on profit-taking after auction, Nikkei bounce

* Midterm, long-end JGBs sag on profit-taking, Nikkei rise

* Futures eke out gains on U.S. Treasuries

By Shinichi Saoshiro

TOKYO, Dec 3 (Reuters) - Japanese government bonds sagged on Wednesday due to a bounce in Tokyo shares and profit-taking following a solid 10-year auction the previous day.

December 10-year JGB futures eked out slight gains, lifted by an overnight rise in U.S. Treasuries.

"The bond market is top heavy. Participants are wary of profit-taking by investors who bought the new 10-year bonds yesterday," said Atsushi Ito, a fixed-income strategist at Morgan Stanley.

The benchmark 10-year JGB yield touched a 7-½ month low on Tuesday, drawing support in part from the solid results of the 1.9 trillion yen ($20.40 billion) 10-year government bond tender.

"Some bond investors buy one day and sell the next, as their tolerance to risk is lower. Risk appetite may improve, however, if the Nikkei climbs back above 9,000, for example," he said.

The Nikkei .N225 advanced 0.9 percent on Wednesday as exporters were scooped up by bargain hunters following gains on Wall Street the previous day. [.T]

Due to their safe-haven status, JGBs have been supported over the past several weeks when Tokyo shares weaken.

But analysts said Tuesday's sharp slide that took the Nikkei below the 8,000 threshold began reviving memories of the market tumult in October, when tumbling stocks forced investors to dump bonds and seek safety in cash.

December 10-year JGB futures climbed 0.05 point to 139.76 2JGBv1.

The benchmark 10-year yield <JP10YTN=JBTC> rose 1 basis point to 1.380 percent.

The five-year yield <JP5YTN=JBTC> climbed 1.5 basis points to 0.840 percent.

The two-year yield <JP2YTN=JBTC> dipped 1 basis point to 0.535 percent. (Editing by Chris Gallagher)