JGBs down slightly but moves limited ahead of Cyprus vote, FOMC

(Reuters) - Japanese government bonds eased on Tuesday with the benchmark 10-year yield rising off a near-decade low, but moves were restrained as investors awaited a controversial bailout plan for Cyprus which was set for a parliamentary vote later in the day.

* "There is a feeling that the stock market selloff and yen rise on Monday on the Cyprus news was overdone, so there are some buybacks today, and JGBs are adjusting," said a fixed-income fund manager at a Japanese trust bank in Tokyo.

* A weekend announcement that Cyprus would impose a levy on bank accounts as part of a 10 billion euro ($13 billion) bailout by the European Union broke with previous practice that depositors' savings were sacrosanct, heightening fears that similar measures could be imposed on other struggling eurozone members.

* The radical step sent stock markets, commodities and the euro tumbling on Monday, but Cypriot and euro zone officials have since sought to soften the impact on small savers to try to ease passage of the bill through parliament, and stave off a default that could reignite the euro zone crisis.

* Major moves were not expected ahead of a Japanese public holiday on Wednesday, and the Cyprus vote later in the session, he said, adding that expectations of more JGB purchases by the Bank of Japan continued to underpin the market, the Tokyo-based fixed-income fund manager said.

* Japan's Nikkei average rebounded 1.9 percent on Tuesday after marking its biggest one-day drop in 10 months the previous session on concerns about the unusual Cyprus bailout plant.

* Investors also awaited the outcome of the U.S. Federal Reserve's two-day policy meeting which will begin later on Tuesday, for clues on whether the central bank is considering slowing or ending its bond purchases after recent data showed the U.S. economy picking up momentum.

* The 10-year JGB yield added 1 basis point to 0.595 percent, moving away from the previous session's 0.585 percent that matched a level struck on March 4, its lowest since June 2003.

* The 10-year JGB futures contract ended morning trade down 0.03 point at 145.42. It rose as high as 145.46 on Monday, a record for a front-month contract.

* The five-year yield rose half a basis point to 0.115 percent, inching away from its record low of 0.095 percent hit earlier this month.

* The 20-year yield as well as the 30-year yield inched up half a basis point each to 1.575 percent and 1.740 percent, respectively.

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