JGBs steady after smooth 2-year auction

TOKYO, March 26 (Reuters) - Japanese government bonds were mostly steady on Thursday, after a sale of two-year notes went as investors had expected.

The Ministry of Finance offered 2.5 trillion yen ($21.04 billion) of 2-year bonds with a 0.1 percent coupon. The lowest accepted price of 100.130 was in line with market expectations, while the bid-to-cover ratio rose to 4.80 from 4.39 at last month's 2-year sale. The tail between the average and lowest accepted prices narrowed to 0.008 from last month's 0.009, indicating slightly stronger demand.

The benchmark 10-year yield was flat at 0.325 percent, while the 2-year yield was also flat at 0.025 percent.

Prices firmed slightly in the superlong zone, with the yield on 20-year JGBs and 30-year JGBs both edging down half a basis point to 1.065 percent and 1.260 percent respectively.

June 10-year JGB futures added 0.01 point to close at 147.86.

($1 = 118.8200 yen) (Reporting by Tokyo markets team; Editing by Simon Cameron-Moore)