What should be the idle JVM setting for the LPAR having 16 GB of memory? Currently the JVM setting is set to
-Xms1024M -Xmx10240M
My understanding is that there is a restriction to the amount of memory the JVM can use. So even though you have 16GB, you may not be able to use too much of it with a single VM instance.
For your information:
You can confirm by running JConsole on your JVM process and check the various memory settings (e.g. heap max and current heap utilizations).