TOKYO, May 9 (Reuters) - Japanese government bond prices dropped slightly on Tuesday, though the benchmark yield inched down from its earlier high after solid demand at a 10-year auction.
The benchmark 10-year cash JGB added half a basis point to 0.030 percent, down from 0.035 percent earlier in the session, while 10-year JGB futures ended down 0.04 point at 150.78. Futures rose to their session high of 150.84 after the 10-year sale results were announced, and were slightly better than market participants had expected.
The Ministry of Finance offered 2.3 trillion yen ($20.30 billion) of 10-year JGBs with a 0.1 percent coupon. Some 47.6053 percent of the bids were accepted at the lowest price of 100.67.
The sale drew bids of 3.76 times the amount offered, down from the previous sale's bid-to-cover ratio of 3.96 times. The tail between the average and lowest-accepted prices narrowed to 0.01, compared with last month's offering at 0.03, indicating slightly stronger demand for the bonds.
A slump in equities also underpinned bonds. Japan's Nikkei stock index ended down 0.3 percent.
But rising overseas bond yields took their toll in Tokyo. The benchmark U.S. Treasury yield hit a four-week high on Monday in advance of the sale of $62 billion in bond supply at a quarterly refunding this week, and against a backdrop of improved investor risk appetite after centrist Emmanuel Macron's sealed his victory in France's presidential vote on Sunday.
In the superlong zone, the 20-year JGB yield added 1.5 basis points to 0.590 percent, while the 30-year JGB yield also rose 1.5 basis points to 0.820 percent.
The two-year JGB yield was up one basis point at minus 0.190 percent, its highest since April 28.
Bank of Japan Governor Haruhiko Kuroda said on Tuesday he expects to meet the central bank's 2 percent inflation target around next fiscal year if the BOJ continues with its current monetary easing.
Speaking in the lower house fiscal and monetary policy committee, Kuroda said the BOJ would adjust policy if needed, but that the central bank had recently upgraded Japan's economic outlook and the global economy was growing stronger.
$1 = 113.3200 yen Reporting by Tokyo markets team; Editing by Sherry Jacob-Phillips