TOKYO, July 3 (Reuters) - Japanese government bonds

(JGBs) fell on Thursday as the finance ministry carried out its

first super-long debt auction under a reduced-issuance scheme

introduced in response to record-high yields.

Prices of the benchmark JGB declined, sending

its yield up 2 basis points (bps) to 1.445%. The 20-year yield

rose 2 bps to 2.345%. The 30-year JGB

gained 1.5 bps to 2.9%.

Yields move inversely to bond prices.

The market for JGBs, particularly long-dated bonds, has

faced challenges of late amid the Bank of Japan's (BOJ) tapering

of bond purchases, softer demand from life insurers and concerns

over the nation's fiscal health.

A 20-year JGB auction in May saw the weakest demand since

1987 and the subsequent sales of 30- and 40-year securities saw

subdued uptake in the market.

Yields on the super-long debt surged to record levels,

prompting the government to curtail the issuance of the

securities.

The Ministry of Finance sold about 700 billion yen ($4.9

billion) of 30-year JGBs on Thursday, down from about 800

billion yen at the previous auction.

The auction's bid-to-cover ratio, a measure of demand,

was 3.58 versus 2.92 in June.

The tail, another measure of demand, was 0.31 yen versus

0.49 yen previously. Benchmark JGB futures held declines after

the sale.

($1 = 143.5700 yen)