Japan's 10-year bond yields rise as Middle East conflict fuels inflation fears

TOKYO, March 6 (Reuters) - The benchmark 10-year Japanese government bond (JGB) yield edged higher on Friday as investors remained on edge over the risk that a prolonged Middle East conflict could stoke inflation by driving up energy costs.

The 10-year JGB yield rose 1.5 basis points (bps) to 2.170%. Yields move inversely to bond prices.

"Early on, inflation worries tied to higher crude oil prices are likely to weigh on the market, leading to a sell-led start," Kazuya Fujiwara, a bond strategist at Mitsubishi UFJ Morgan Stanley Securities, said in a note. "With no key economic releases or supply-demand events on the calendar, buybacks are likely to be limited for lack of catalysts, and the market is expected to stay heavy with capped upside through the day."

U.S. Treasury yields climbed overnight for a fourth consecutive session as the expanding war in Iran put upward pressure on oil prices, fanning worries about inflation and dampening expectations of rate cuts by the U.S. Federal Reserve.

The 20-year JGB yield climbed 1 bp to 2.990%. The 30-year yield was flat at 3.375%. The yield on the 40-year JGB , Japan's longest tenor, fell 0.5 bps to3.585%.

Other tenors are yet to trade.