TREASURIES-US yields rise as markets react to Middle East conflict

June 13 (Reuters) - U.S. Treasury yields rose on Friday after Israel's strike on Iran, as markets absorbed a sudden shock to commodity and stock prices, reversing some of the declines after four days mainly in the red.

Israel said early on Friday it had struck Iranian nuclear and military targets to block Tehran from developing atomic weapons, and Iranian media and witnesses reported explosions including at the country's main uranium enrichment facility.

The attack on multiple Iranian targets sparked a surge in oil prices and rekindled inflation concerns, which overshadowed economic and trade news earlier in the week that boosted demand for U.S. sovereign debt and pushed yields lower.

Consumer data from the University of Michigan also showed an unexpectedly large jump in sentiment and expectations. However, markets appeared to show little interest in light of the unfolding violence in the Middle East.

Earlier in the week, yields had fallen on cooler-than-expected consumer inflation data, reported progress in reaching a detente in the U.S.-China trade relations and signs of deepening weakness in the U.S. labor market.

Slawomir Soroczynski, head of fixed income at Crown Agents Investment Management in London, said the movement away from U.S. debt instruments was a surprise under the circumstances.

"The price action in bonds does not show what one would normally expect, which would be a safe-haven bid," he said.

"It is too early to call the full impact on bonds, but if some energy forecasters' views start materializing and oil prices go much higher, then we can see an impact on the shape of the U.S. yield curve with aggressive flattening taking place because short-term yields would rise more."

The so-called yield curve, which measures the spread between yields on 2-year and 10-year U.S. notes, is often used to gauge market estimates of recession risk.

The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB was last up 4.8 basis points to 4.405%. The yield on the 30-year bond US30YT=TWEB rose 4.7 basis points to 4.89%.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=TWEB, seen as an indicator of economic expectations, was at a positive 44.9 basis points.

The two-year US2YT=TWEB U.S. Treasury yield, which typically moves in step with interest rate expectations, rose 4.6 basis points to 3.952%.

The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) US5YTIP=TWEB was last at 2.309% after closing at 2.284% on June 12.

The 10-year TIPS breakeven rate US10YTIP=TWEB was last at 2.283%, indicating the market sees inflation averaging about 2.3% a year for the next decade.