TOKYO, April 22 (Reuters) - Japanese government bonds

slumped on Wednesday after rallying for two sessions, as

uncertainty surrounding U.S.-Iran peace talks and elevated oil

prices re-ignited inflation concerns.

The benchmark 10-year JGB yield rose 2 basis

points (bps) to 2.4%, while the 30-year yield

added 1.5 bps to 3.570%. Yields move inversely to bond prices.

"The rise in yields is basically being driven by oil prices

staying high because of the turmoil in the Middle East," said

Katsutoshi Inadome, a senior strategist at Sumitomo Mitsui Trust

Asset Management.

U.S. President Donald Trump said he would indefinitely

extend the ceasefire with Iran, hours before it was set to

expire, to allow the two countries to continue peace talks to

end the conflict. It was not immediately clear whether Tehran or

the U.S. ally Israel would agree to the extension.

Oil prices rose before turning lower, with Brent crude

futures down 16 cents, or 0.2%, at $98.32 a barrel at

0153 GMT.

The two-year yield, the one most sensitive to

Bank of Japan policy rates, increased 1 bp to 1.355%. The

five-year yield rose 2 bps to 1.825%.

Meanwhile, the yield on the 40-year JGB,

Japan's longest tenor, was flat at 3.78%.

(Reporting by Satoshi Sugiyama; Editing by Subhranshu Sahu)