TOKYO, Nov 25 (Reuters) - Japanese government bonds mostly rose on Friday, following upbeat results from a 40-year sale that brought superlong bond yields off their session highs, as well as speculation that Japan's finance ministry might trim its issuance of longer maturities.
The benchmark 10-year JGB yield was flat at 0.030 percent, after earlier rising to 0.045 percent, its highest since February.
December 10-year JGB futures ended 0.07 point lower at 150.37, down from an afternoon high of 150.55.
The 20-year yield shed 1.5 basis points (bps) to 0.475 percent, pulling away from an eight-month high of 0.510 percent touched earlier, while the 30-year yield skidded 3.5 bps to 0.605 percent from an eight-month high of 0.665 percent.
The 40-year bond yield fell 5 bps 0.715 percent after earlier rising to 0.790 percent, its highest since March 11.
"The 40-year sale was better than expected," said Tadashi Matsukawa, head of fixed income investment at PineBridge Investments in Tokyo.
"Also, there's a primary dealers' meeting tomorrow, and a JGB investors' meeting on Monday, so some players might expect a reduction in issuance size might be discussed for calendar 2017," he said, including the restoration of 40-year issuance size to 400 billion yen ($3.53 billion) as it was before being raised to the current 500 billion yen.
"Maybe some dealers are betting on that, which is pure speculation," he said. He added that he covered his own short positions and went slightly long, just in case the issuance size is trimmed.
The Ministry of Finance said it sold 499.7 billion yen of reopened 40-year bonds on Friday with a 0.4 percent coupon at a highest accepted yield of 0.7250 percent.
The sale drew bids of 2.98 times the amount offered, up from the previous sale's bid-to-cover ratio of 2.73 times.
Data released early on Friday showed Japan's core consumer prices marked their eighth straight month of annual declines in October, illustrating the sheer scale of the central bank's struggle to beat deflation and stagnant growth with diminishing policy options.
($1 = 113.4000 yen) (Reporting by Tokyo markets team; Editing by Eric Meijer)