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JGBs gain on solid 10-yr auction, falling stocks

TOKYO, March 1 (Reuters) - Japanese government bonds firmed on Thursday as an auction of 10-year bonds attracted solid bids while a fall in Japanese and global share prices made bonds more attractive.

The benchmark 10-year JGB yield dropped 1.0 basis point to 0.035 percent, its lowest level in almost three months.

The price of 10-year JGB futures gained 0.02 point to 150.95.

The 2.3 trillion yen 10-year JGB auction attracted bids 4.53 times the offer, little changed from the bid-to-cover ratio of 4.58 last month.

But the tail, the gap between the lowest and average price at the auction, shrank to 0.01 from previous 0.02, suggesting strong demand even as the 10-year yield flirted near three-month lows.

The 20-year JGB yield was flat at 0.540 percent while the 30-year JGB yield dipped 0.5 basis point to 0.750 percent.

Also helping JGBs was the fall in Japanese share prices. The Nikkei fell 1.6 percent as hawkish comments from Federal Reserve Chair Jerome Powell rattled global stock markets.

JGBs showed no reaction to comments from Bank of Japan board member Goushi Kataoka calling for additional stimulus.

Kataoka is the only member who has consistently voted against BOJ Governor Kuroda in recent months and has been widely seen as an outlier. (Reporting by Tokyo Markets Team; Editing by Sunil Nair)