TOKYO, April 17 (Reuters) - Japanese government bonds edgedhigher and the yield curve flattened on Tuesday, taking cues froman overnight climb in U.S. Treasuries and solid demand for newlyauctioned 30-year debt.

The favourable auction result gave some reprieve to the longend of the yield curve, which had been under pressure since latelast week as traders prepared for fresh supply including the30-year offer and next week's 20-year JGB auction.

"The yield curve had been steepening as traders focused onthe 30-year offer, and I think the market is feeling some reliefnow that the auction is over," said Yasunori Kuroda, a managerfor Sompo Japan Insurance Inc.'s fixed income division.

The Finance Ministry said its offer of 600 billion yen ($5billion) in 30-year JGBs produced a lowest price of 100.80 and anaverage price of 100.86. The bid-to-cover ratio was 4.26, up from 3.30 at the previous30-year bond auction in January.

June 10-year JGB futures ended 0.05 point higher at 133.75, having trimmed some gains after rising to an intradayhigh of 133.90 after the auction results were announced.

U.S. Treasuries rebounded on Monday on a report showing asurprisingly sharp deterioration in home builder sentiment and onbargain hunting by some bond investors after U.S. benchmarkyields reached two-month highs. Continued...

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