TOKYO, July 10 (Reuters) - Long-term Japanese government

bonds (JGBs) rallied on Thursday ahead of an auction that will

test investor appetite amid fiscal worries that have driven

yields higher, while markets remain focused on the upper house

election scheduled for July 20.

Prices for 20- and 30-year JGBs sank earlier this week,

driving yields sharply higher, on concerns that the government's

ruling coalition may lose their majority in the election.

The potential defeat could give power to opposition parties

who have pledged in their campaign platforms to cut or abolish

the sales tax.

The Ministry of Finance this month trimmed issuance of those

bonds in response to record-high yields on those bonds scaled in

May.

The 20-year JGB yield fell 2.5 basis points

(bps) to 2.485%. The 30-year yield fell 4.5 bps

to 3.010%.

The benchmark 10-year yield edged down 0.5 bp

to 1.495%.