Japan Bond Yields Rise as Middle East Tensions Escalate

TOKYO, March 13 (Reuters) - Yields of Japanese government bonds (JGBs) rose on Friday, hit by a double blow from higher crude oil prices and a weaker yen amid escalating tensions in the Middle East, stoking inflation fears.

The benchmark 10-year JGB yield JP10YTN=JBTC rose 2.5 basis points to 2.205%, while the five-year yield JP5YTN=JBTC rose 2 bps to 1.645%. Yields move inversely to bond prices.

"Rising expectations for higher crude oil prices and the yen's weakness, against the backdrop of concerns that heightened tensions in the Middle East will be prolonged, are likely to weigh on the market," Kazuya Fujiwara, bond strategist in Mitsubishi UFJ Morgan Stanley Securities, said in a note.

He added trading is expected to gradually turn directionless after initial selling runs its course.

U.S. Treasury yields rose overnight over concerns about resurgent inflation from the U.S.-Israeli war on Iran that could keep U.S. interest rates higher for longer. US/

Other tenors were yet to be traded as of 0019 GMT.