TREASURIES-U.S. bonds slide after rally in stocks

TOKYO Oct 11 (Reuters) - The cash market for U.S. Treasuries dropped sharply in Asia on Tuesday, reacting to a pledge by German and French leaders to ease the euro-zone debt crisis which pushed equity markets higher the previous day.

* US cash bond trading had been closed on Monday for the Columbus Day holiday.

* Ten-year notes fell 25/32 in price to yield 2.164 percent , up some 10 basis points from late U.S. trade on Friday and the 10-year yield spiked as high as 2.183 percent shortly after the Asian open, briefly hitting a one-month high.

* German Chancellor Angela Merkel and French President Nicolas Sarkozy promised on Sunday to unveil a comprehensive new package to ease the euro zone's debt crisis.

* Ten-year note futures, which had been open for trade on Monday and took a slide as stock markets surged, regained a bit of a ground and rose 16/32 in price to 128-3/32 .

* "It's still selling on a 'pledge' and not a concrete plan -- that's why the trade is very choppy. Investors are still nervous," said Arihiro Nagata, head of foreign bond trading at Sumitomo Mitsui Banking.

"But my sense is that it's not the end of this move. If the (Franco-German) plan indeed gets underway we may see yields advance further to around 2.4-2.5 percent before the end of the month, although I'd be exteremely cautious here," he said.

* A trader for a U.S. financial institution in Tokyo said the rise in yields this morning has attracted some bargain-hunting interest, especially at the longer end of the yield curve.

* Having briefly dipped below 2.8 percent last week, the yield on the 30-year bond recovered to last trade at 3.085 percent.

* Treasury Department sells 3-year notes at 1700 GMT.