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JGBs steady on firm 10-year auction, higher stocks cap rise

TOKYO, June 1 (Reuters) - Japanese government bond prices were mostly steady on Thursday, supported by a firm 10-year auction, but confined to a tight range as Tokyo stocks were on track to rise for the first time in five days.

The benchmark 10-year JGB yield was unchanged at 0.040 percent. June 10-year JGB futures inched up 0.03 points to 150.70, drawing early support from an overnight rise by U.S. Treasuries.

The bid-to-cover ratio, a gauge of demand, at Thursday's 2.3 trillion yen ($20.73 billion) 10-year sale remained at a relatively high 3.64, from 3.76 at the previous auction in May.

Analysts said the new 10-year sale attracted sufficient demand with yields on the maturities hovering around 0.05 percent, which has served as a ceiling since early April.

Japan's Nikkei rose more than 1 percent, buoyed by upbeat news of Japanese companies' growing capital expenditure as well as the dollar's ascent from overnight lows against the yen.

Long-dated U.S. Treasury yields touched their lowest in more than five weeks on month-end buying and U.S. housing data that fanned doubts that the Federal Reserve would raise interest rates again in 2017 beyond June.

($1 = 110.9400 yen) (Reporting by the Tokyo markets team; Editing by Sherry Jacob-Phillips)