TOKYO, Aug 12 (Reuters) - Japanese government bond (JGB)

yields rose on Wednesday as traders increasingly expected the

Bank of Japan to raise rates next month, while a rise in crude

oil prices amid renewed uncertainty over the Middle East added

to inflation concerns.

Markets were also focused on the U.S. Consumer Price Index,

due later on Wednesday, for clues on the direction of Federal

Reserve interest rates.

The benchmark 10-year JGB yield rose 4.5

basis points (bps) to 2.850%. Yields move inversely to bond

prices.

The 5-year yield rose 2.5 bps to 2.110%, a

record high. The 2-year yield, the most sensitive

to Bank of Japan policy rates, increased 3.5 bps to 1.645%, the

highest since May 1995.

Traders are increasingly pricing in the possibility of

another BOJ rate hike in September, earlier than the previously

expected December timing, which would have marked six months

since the last rate increase in June.

The shift follows recent Japan-U.S. joint currency

intervention to support the yen and what was seen as a hawkish

tone in the BOJ's July meeting summary of opinions.

The summary of opinions released on Monday "gave an

impression that policymakers are positive about deciding on a

rate hike at the September meeting," Barclays chief Japan

economist Naohiko Baba said in a note.

Markets were pricing in a 78% chance of a September move as

of midday Tuesday, up from 66% on Monday afternoon, according to

Tokyo Tanshi data.

The 20-year JGB yield climbed 3 bps to

3.715%. The 30-year yield added 4 bps to 3.990%.

Oil prices ticked higher on Wednesday after Iran's top

security official said that the vital Strait of Hormuz shipping

route will remain closed unless the United States accepts Iran's

conditions to end the war and after the U.S. and Yemen's

Iran-aligned Houthis reported separate attacks on shipping.

Brent crude futures rose 0.74% to $89.57 a barrel,

while U.S. crude was up 0.76% to $83.84.