TOKYO, June 1 (Reuters) - Japanese government bond

yields rose off multi-week lows on Monday, as hopes for a peace

deal in the Middle East faded with the U.S. and Iran still

divided over significant issues.

-Yields on 10-year JGB rose 3.5 basis points

to 2.69%, after falling to as low as 2.635% on Friday for the

first time since May 14

-Ten-year JGB futures fell 0.27 yen to 128.62 yen;

yields rise when bond prices fall

-The energy shock from the Iran war has fanned inflation

worries, lifting bond yields worldwide

-"Considering that JGB yields fell last week on expectations

for the U.S. and Iran to reach an agreement, there is room for

yields to rise following reports that President (Donald) Trump

has postponed making a decision," said Mizuho analyst Yuhi

Kawano

-Yields on 20-year JGBs rose 2.5 bps to

3.595% on Monday; 30-year yields rose 1.5 bps to

3.93%

-Five-year JGB yields rose 3.5 bps to 1.92%;

two-year yields rose 1 bp to 1.4%

-The Ministry of Finance will auction around 2.6 trillion

yen ($16.3 billion) of 10-year JGBs on Tuesday

-Japanese companies' pace of annual spending on plant and

equipment stalled in the first quarter, data showed on Monday

-Bank of Japan policymakers are considering pausing the

central bank's quantitative tightening programme

-Traders see a 70% chance of the BOJ raising rates by a

quarter point at its next policy meeting on June 15-16,

according to LSEG data

($1 = 159.46 yen)

(Reporting by Kevin Buckland; Editing by Mrigank Dhaniwala)