TOKYO, March 14 (Reuters) - Yields on shorter-dated

Japanese government bonds fell on Friday, supported by overnight

declines of U.S. Treasury yields, while those on longer-dated

bonds rose amid a lack of demand at the fiscal year-end.

The two-year JGB yield fell 1 basis point to

0.845% and the five-year yield fell 1.5 bps to

1.135%.

"The declines in the U.S. Treasury yields underpinned

sentiment for the bonds with shorter maturities, but the overall

market sentiment is not good," said Keisuke Tsuruta, a senior

fixed income strategist at Mitsubishi UFJ Morgan Stanley

Securities.

"Demand is limited at the end of the fiscal year, while

there is a caution ahead of the Bank of Japan's policy meeting

next week," he added.

The BOJ is set to keep interest rates steady next week and

discuss how much risk the escalating U.S. trade war poses to the

export-reliant economy, which will be key to the timing of its

next rate hike.

The signs of wage rise also drove caution for interest

hikes, strategists said. Big Japanese firms this week offered

bumper pay hikes in wage talks with unions for a third

consecutive year, backing the BOJ's view that sustained wage

gains will keep inflation durably around its 2% target.

The 10-year JGB yield was flat at 1.545%.

The 20-year JGB yield rose 0.5 bp to 2.28%

and the 30-year JGB yield was flat at 2.6%.

The 40-year JGB yield rose 1 bp to 2.935%.

U.S. Treasury yields fell on Thursday as tumbling stocks

boosted demand for safe-haven U.S. government debt with an

escalating trade war between the United States and trading

partners threatening to dent growth and boost inflation.