TOKYO, June 3 (Reuters) - Yields on 10-year Japanese

government bonds sank on Tuesday, reversing an earlier rise,

after results of an auction of the securities saw the highest

demand since April last year.

The 10-year yield dropped 3 basis points

(bps) to 1.475%, as of 0349 GMT, following an earlier rise of as

much as 1.5 bps as Japanese yields initially tracked a rise

among U.S. peers from overnight.

Benchmark 10-year JGB futures rose 0.15 yen to

139.17 yen.

Two-year JGB yields slipped 0.5 bp to 0.745%.

Other tenors had yet to trade following the announcement of

the auction results at 0335 GMT.

Mizuho's chief desk strategist, Shoki Omori, called the

result "a remarkably robust outcome ... that likely caught most

observers off guard."

The bid-to-cover ratio, a measure of demand that gauges the

number of bids against the amount of securities on offer, rose

to 3.663 from 2.544 at the prior sale in May. At the auction

last April, the ratio was 3.799.